Veterans of the Armed services (both active and discharged) usually qualify for a 100% financed Government backed home loan. However, not all homes will qualify.
So, what type of homes do qualify?
In general, Single Family Detached Residences 1-4 units will qualify. This includes, single family detached homes, condos or townhomes, prefabricated homes, new homes, duplex, triplex or even a four-unit home. The VA loan an even be used to re-finance an existing loan on the above-mentioned property types.
So what is a Detached Home? Detached is just Real Estate jargon for a home that functions independently from the surrounding homes. Although it may share common walls (as in a condo) but the utilities are independent. They do not share hot water heaters or electric that runs off the same meter (Think hotels, dorms or public housing known as “the projects”. Those types would not qualify for a VA loan)…Most homes in California are Single Family Detached Residences and DO qualify.
What about the Condominium or Townhome? YES! Absolutely they qualify…with a caveat. The association which governs the common areas, must have applied for and been granted VA approval. This is not as difficult as the FHA process as the rules are not identical. And unlike the FHA, the VA condo approval does not have an expiration date. Many condos lost their FHA certification in the market downturn of 2007-2013. Many have either not bothered to reapply or do not qualify for FHA approval. But the VA approval remained intact! Therefore, what we currently have in the Southern California area is, multitudes of condo’s that cannot have FHA financing but DO qualify for VA!!
Prefabricated homes (also referred to as manufactured homes) must be on a permanent foundation and on its own land. Homes in a park where you lease the land, would not qualify. You can see the VA’s point in this. If they are going to back the loan, they want to be sure you can remain there for the life of the loan. A land lease (even a lengthy one) could be broken and would not provide that guarantee.
New homes absolutely qualify but must have a habitability certification. VA even has a construction loan for new builds. Not all lenders offer this type of VA backed loan. A good REALTOR will be able to help you find a lender who does offer that type of loan if needed.
Multi-plex homes (2-4 units) qualify with a few conditions.
As with any VA loan, the borrower must occupy the property.
The units themselves, although they may have common or shared walls, must function independently of each other. They must have their own private entrance and the utilities must operate independently of each other and be able to shut off each individual unit. The lender may impose their own layer of requirements. Ask your REALTOR to help guide you if you plan to buy one of these using the VA loan.
Single Family Residences in an Association (HOA) do NOT need VA approval. This only applies to Condominiums and/or Townhomes as I had published in an earlier article.
All told, VA will guarantee the home loan for most homes available in California. The majority of Veterans, Active, Honorably or Medically discharged will qualify as well. A good VA REALTOR like the ones at Veteran Housing Center will be an invaluable guide through the buying process.