Can I Buy Land With A VA Loan?
Yes, you can use a VA loan to buy land, but only if you plan to build a home on it or purchase an existing home on the property. VA loans cannot be used to buy land as an investment or for a vacation property. They are designed specifically to help veterans, service members, and eligible surviving spouses secure a primary residence.
Since buying land with a VA loan involves construction planning and specific requirements, it's important to understand the complete process and rules before starting. In this guide, we’ll break down all the steps you need to take, what to expect, and how to make the most of your VA loan benefits when purchasing land and building a home.
Can You Use a VA Loan for Land? Understanding the Basics
The VA loan rules for buying vacant land require that you plan to build a primary residence on the property. These loans aren't available for land-only purchases, and all properties must meet VA requirements, including safety, livability, and environmental standards. Construction needs to begin within a reasonable timeframe after purchase, typically within 12 months, to ensure compliance with VA guidelines.
VA Loan for Land and Building a House
A VA construction loan provides comprehensive coverage for your project. The loan combines the land purchase with all construction costs into a single package, simplifying the financing process. This includes the complete land purchase, construction expenses, site improvements, required permits, and builder fees. The loan also covers contingency funds to handle unexpected costs during construction, helping prevent budget overruns and project delays.
This type of loan allows veterans to build their dream home from the ground up without having to take out separate loans for the land and construction phases, which can save money on interest rates and reduce the overall financial burden.
How to Use a VA Loan for Land and Construction
The process starts with VA pre-approval, which confirms your eligibility and sets a budget for your project. Next, you'll need to find suitable land that meets VA requirements. You’ll then select a VA-approved builder and submit detailed construction plans for review. These plans need to be thorough, including everything from the design and floor plans to the estimated timeline and costs.
After the VA approves the property and plans, the next step is loan closing—this is when the loan officially funds and construction can begin. Throughout the building phase, the VA and your lender will conduct regular inspections to ensure the project adheres to approved guidelines, keeping everything on track until you receive your certificate of occupancy.
Need help with VA pre-approval or finding a VA-approved builder? Contact Mortgage Heroes to get started.
VA Loan Land Purchase Requirements
Your chosen property must meet specific VA criteria to qualify for a loan. The land must be zoned for residential use and must have year-round road access, ensuring the property is suitable for primary residency. Utility access must be available or achievable within the construction plan, and the property needs to pass an environmental assessment, which checks for potential hazards or issues such as flood risks or soil instability.
Additionally, local building codes must be satisfied, and the property must have a clear title to avoid any ownership disputes. These requirements are in place to protect both the borrower and the VA, ensuring the land is suitable for building a safe and comfortable home.
Can a VA Loan Cover Land and Home Build?
Yes, VA construction loans provide comprehensive coverage. Your loan will include the land purchase price and all construction costs. This extends to site preparation, utility connections, building permits, and contractor fees. The loan even covers the cost of architectural plans and includes a construction contingency fund for any unexpected expenses that may arise during the build.
VA Loan Rules for Land with Mobile Homes
Mobile home purchases through VA loans have specific requirements. The mobile home must be new and installed on a permanent foundation that meets VA standards, ensuring stability and safety. Professional installation is mandatory, and the property must become your primary residence. Additionally, all standard VA property requirements still apply to these purchases, including the need for year-round road access, residential zoning, and proper utility connections.
If you're considering a mobile home purchase, Mortgage Heroes can help you understand the VA requirements and find the right options for you.
VA Loan to Buy Land and Build: Step-by-Step
Preparation
Verify your eligibility for a VA loan.
Obtain your Certificate of Eligibility (COE).
Get pre-approved for a construction loan to determine your budget.
Land Selection
Focus on finding property that meets VA standards, including proper zoning and utility access. Complete any necessary assessments to ensure the land is suitable for building.
Construction Planning
Work with your VA-approved builder to create comprehensive building plans and accurate cost estimates. Submit these for VA approval before proceeding.
Loan Processing
Complete your application with all required documentation, including the property evaluation and builder agreements.
Building Phase
After closing the loan, construction can begin. Regular inspections will ensure compliance with VA standards until you receive your occupancy certificate.
Is Land Eligible for a VA Loan?
Land eligibility depends on several factors. The property must be part of a construction plan and meet VA property requirements. You'll need to make it your primary residence, and construction should start within 12 months of closing. Additionally, the property must comply with local zoning laws and pass environmental review standards.
Can I Get a VA Loan for Land Only?
No, VA loans aren't available for land-only purchases. However, there are several options for using your VA loan benefits if you’re interested in buying land. You can:
Buy land as part of a construction loan.
Purchase land with an existing home on it.
Acquire a farm with a residence.
Buy land with plans for a manufactured home installation.
These options ensure that the VA loan is used to provide a primary residence, in keeping with the mission of the VA home loan program.
If you're unsure about which option is right for you, Mortgage Heroes can help you explore your VA loan possibilities.
VA Farm and Rural Properties
VA loans can be used to buy farm properties, provided there is a primary residence on the land. The residence must meet all VA requirements, including the occupancy rule, meaning it must be your primary residence. Farming activities are allowed, but they must remain secondary to residential use. The VA loan cannot cover agricultural expenses, so the focus must be on the home itself.
The Take Away
While you can't get a VA loan for land only, the VA loan program offers excellent options for buying land with planned construction. By understanding the rules and working with qualified professionals, veterans can make the dream of building their own home a reality.
For best results, start by contacting VA-approved lenders and researching qualified builders in your area. Begin your property search with clear construction plans in mind, and maintain a realistic timeline for your project. Gather all required documentation early to streamline the process, and work closely with professionals experienced in VA construction loans to ensure compliance with all requirements and a smooth building process.
If you need expert guidance throughout this journey, Mortgage Heroes is ready to help you turn your dream home into reality.
