VA home renovation loans are a benefit not often taken advantage of, according to one renovation lender.
Sean Thompson, vice president and national renovation manager for Caliber Home Loans, has been in the renovation lending space for more than 24 years and was a top originator in the 2000s.
He joined Caliber Home Loans in 2017 and hasn’t looked back.
“I saw a unique opportunity to marry lending with a well-oiled purchase driven mortgage company,” he said.
He’s passionate about serving the military community and supporting service members in using their hard-earned benefits. The VA home renovation loan in particular, he said, is a benefit not used enough.
“The product is designed to give our military customers an opportunity to purchase or refinance a home with intent to repair, update and/or customize,” Thompson said. “Using this product allows the member to use up to $50,000 in simple scope repairs in areas like kitchens, bathrooms or the floor. You can also replace appliances and roofs with it.”
Key benefits of the loan, according to Caliber, include:
- Qualifying for renovation funds from $5,000 up to 75% of the home’s postrenovation value.
- Lowering closing costs due to closing a single transaction.
- Single-family homes, two- to four-unit properties, modular homes, second homes, and homes in Planned Unit Developments are eligible.
- Fixed- and adjustable-rate mortgage options are available.
Many military families have contemplated selling their homes in a hot market but find the supply of new homes is scarce. Using the VA home renovation loan might be the best kept secret for 2022.
“This also makes sense when you are buying a home in less than perfect conditions while putting little down but still need a way to invest in upgrades,” Thompson said.
This isn’t the solution to all of the needs that might arise in an older home but can be a great fix as military members budget and hold out over buying a brand-new home.
“Although you can get as much as $50,000 for customization, the work has to start within 10 days after your closing,” he said. “You have 75-90 days to complete the repairs and no structural or major repairs can be done with this product.”
Any repairs with this loan product require a general contractor. Thompson encourages military members to get detailed bids from potential contractors.
“Whoever you choose must be registered with the VA as a builder. It doesn’t take that long to get certified but it’s important you let them know up front,” he added.
As military families continue to navigate a challenging housing market, Thompson wants to be encouraging.
“Think about using this style of financing as a way to buy a home being sold at a discount because of its condition and then benefiting from less buyer competition,” he said. “This leads to improved value. Typically home buyers who buy and renovate save thousands compared to buying a home in perfect condition up front.”