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Properties You Can't Buy with a VA Loan
Two Minute Read
Written by Ed Andrews III on April 15th, 2020
Though the VA loan is designed to help veterans purchase homes. There are some restrictions on what types of properties you can purchase with a VA loan. 

In addition to some restrictions on what situations you can use the VA program. So stay tuned and I’ll explain all the ways in which you’ll be prohibited from using the VA program.

1. Investment Property 

The purpose of the VA program is to help veterans purchase homes to live in. Therefore, only loan applications for primary residences will be accepted. VA also excludes second homes/vacation homes from eligible property uses. 

There are some caveats in place to help veterans buy who cannot move into the property right away. For more information on that be sure to watch my video “Do I have to move into the property immediately”.

2. Business Loans

You are not permitted to use the VA loan to purchase a storefront, office space, or some other non-residential property. VA loans are made strictly for veterans to purchase residential property.

3. Unimproved Land

VA loans require you to live in the property. So naturally in the case of land void of a residential unit, there’s not a property for you to live in. However, the VA does have a construction loan product that can be used to cover the cost of land that a home will be built on. 

Texas veterans should consider the Texas Veterans Land Board to finance the purchase of vacant land.

4. Foreign Property

Veterans will only be permitted to purchase property in the United States and American territories with the a VA loan.

5. Housing Cooperative (Co-Op)

A co-op is a housing unit owned by a group of shareholders. Since the shareholders collectively own the building, they all have occupancy rights to it. 

However, none of the shareholders technically own a specific residence within the unit. They merely own equal shares of the building.

6. Lender Specific

The VA allows lenders to determine what types of properties they will exclude from financing in addition to the property types designated ineligible by the VA. So you may find that if you’re trying to purchase something like a mobile home, barndominium , or an income producing property like a farm, that the lender you’re working with may not be able to help you.

This is another reason why it’s important to work with lenders who don’t have overlays (unique lender-specific rules) on VA loans. The VA’s restrictions are more than enough. You want to be able to use your benefit in the way that you see fit. Afterall…you earned it.

Now that you understand what types of properties you can’t buy with a VA loan. You may be asking what are the property requirements for a VA loan. For that be sure to watch my video “what are the VA minimum property requirements” where I’ll be covering the items you need to look for when selecting a home to purchase with a VA loan.

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VA Loans With Ed was created by a veteran for veterans. This is the premier source for veterans to learn everything they need to know about the VA loan, and get the most out of the benefit they earned.

About the Author:
Ed Andrews III

Ed Andrews III is a mortgage loan officer, and U.S. veteran of the Iraq & Afghanistan Wars. He is an expert on VA home loans, and dedicated to helping veterans achieve home-ownership.
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