I’m thrilled to be the 2018 chair of the Federal Financing and Housing Policy Committee, and we had a fantastic meeting this morning. The most exciting development that we have to report is that there really is a VA Renovation Loan (it’s not an urban legend, y’all), and we’ve even identified a lender who can offer it.
Two of our speakers today from the Department of Veterans Affairs — Greg Nelms, Chief of Loan Policy, and Mark Connors, Loan Guaranty Service Lender Liaison — described for us the expansion of the VA Renovation Loan guidelines in the VA Loan Handbook, providing more opportunities for lenders to consider offering VA Renovation Loans. The VA Renovation Loan Program, which functions similarly to the FHA 203(k) loan product, previously existed “in about four lines total” in the VA home loan guidelines. The expansion of those guidelines, which took place in spring of 2018, is about 75% complete, and the VA is continuing to work on completing the guidelines to make sure they are comprehensive and easy for lenders to apply and begin to offer this product to eligible homebuyers.
This is excellent news for military servicemembers and veterans who are finding it more and more difficult to remain competitive in many markets with reduced home inventory and multiple offer scenarios. Additionally, this would give expanded opportunities to VA-eligible homebuyers — instead of limiting their choice of homes to those that fit the Minimum Property Requirements (MPRs), this would mean an expanded number of housing choices available to VA-eligible buyers who would like to purchase a home and complete repairs and/or renovations themselves.
Carol Mitchell of Atlantic Bay Mortgage provided additional information on how the rehabilitation loan works, outlining the details of their VA Renovation Loan program, the process, and the restrictions. Atlantic Bay Mortgage is licensed in 39 states plus the District of Columbia (NOT including AK, AR, CT, HI, MO, MT, NE, NY, ND, SD, and WY).
Details of the expanded VA Renovation Loan guidelines from the VA can be found here.