VA Loans for Land: Can You Use Your VA Benefits to Purchase Acreage?

Between money-saving benefits, such as $ 0 down and no mortgage insurance, veterans and service members wishing to purchase a home will be distressed to find a better option than the VA loan. But what if you do n’t wish to purchase a previously occupied home ? Can the VA loanword help you buy land and build a custom, more individualized home ?

Can You Buy Land With a VA Loan?

Buying domain with a VA loan is possible, but it must be done simultaneously with constructing a newly home. You can’t use a VA loanword to purchase land by itself – evening if you intend to build a base by and by .

Using a VA Loan to Purchase Land

It sounds confuse, but the effect is bare : Buying entirely land ? A VA lend wo n’t work. Buying land and build up on it right away ? The VA will allow it.

There are generally three options if you ‘re looking to buy farming with your VA lend benefits :

  1. Use a VA loan to finance both the construction of your proposed home and the land you intend to build it on simultaneously.
  2. Buy land using some other means of financing. Then use your VA loan benefit to fund the construction of your home.
  3. Buy land and construct your home using some other means of financing – typically a short-term construction loan. Then, once finalized, refinance the construction loan into a VA loan.

If you already own state or inherited a tract of it, you ‘re release to use a VA lend to build upon it. And if you used a unlike loan type to purchase the land initially, you may be able to refinance once home construction is complete .

Rules for Buying Land & Constructing a Property

As with all VA loans, there are some particular requirements you ‘ll need to meet if you plan to buy land and construct a property using your benefits. hera are the big ones :

  • The property you construct can be no more than four units. Each unit must have its own water, sewage, gas, and electricity connections, and you must live in one of the units as your primary residence.
  • The property must be affixed to a permanent foundation.
  • The property must meet the VA’s minimum property requirements and must comply with all federal and local building standards.
  • The land can’t be located in a flood or noise zone (airstrip, highway, railroad tracks, etc.).
  • The land can’t be located near a landfill, dump, or hazardous material facility.
  • The land can’t be vulnerable to landslides, earthquakes, or other geologic instabilities.

Of course, you ‘ll besides need to have a valid Certificate of Eligibility to be eligible, and your builder is required to have a valid VA ID .Learn more about the ins and outs of VA construction loans here.

VA Loans for Land and Construction Aren’t Common

While the VA technically allows it, most lenders do n’t offer VA loans for purchasing land and construction. These types of loans are broadly riskier and, if you do find a lender that offers one, you may need to make a down payment to offset the gamble. You can avoid this by using a construction loanword or other finance intersection to fund your land buy and home construction, then refinance into a VA loan once the home is built. In this scenario, you ‘d then be eligible for the traditional, zero-down payment VA loanword.

The Bottom Line

At the end of the day, you can use a VA loan to purchase land, but it will come with some hard-and-fast stipulations. It besides may not be the easiest or most low-cost road toward homeownership .

See What You Qualify For

Answer a few questions below to speak with a specialist about what your military service has earned you .

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Category : Finance

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