Veterans New Loan Option !
Purchase-rehab loans, recently unveiled by the Department of Veterans Affairs, would cover renovation costs and provide another avenue for military vets to take advantage of no-down VA loans.
About a month ago, the Department of Veterans Affairs released long-awaited guidelines for 100% financed purchase-rehabilitation loans for military veterans, a move that real estate professionals hailed as a much-needed option during the REALTORS® Legislative Meetings & Trade Expo in Washington, D.C., on May 16.
Greg Nelms, chief of loan policy for the VA Loan Guaranty Service, said the agency made its guidelines broad and flexible so lenders can add overlays that make sense for them. Atlantic Bay Mortgage, which is licensed to originate VA loans in 40 states,
caps the rehab component of the loan at $31,100 &
permits an additional $3,900 to cover fees, inspection costs, and construction contingencies of up to 15 percent of the loan amount.
The rehab work, which is limited to repairs and upgrades, must be completed within 90 days of receiving a loan.
The money can't be used for structural additions, although a buyer could add a room if it doesn’t involve removing a load-bearing wall.
The appraisal must support the purchase price plus the improvements, a termite certificate has to be issued before the loan can be approved, and the buyer can’t act as the general contractor.