VA Escrow Holdback Renovation Loan

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VA Renovation home loans provide veterans with an option to finance required repairs and/or desired renovations.

VA Escrow Holdback Loan

The VA Escrow Holdback Renovation loan resembles an FHA 203k or HomeStyle home loan.  Veteran’s finance repairs and/or home renovation costs into their VA mortgage. Also, VA Escrow Holdback and Renovation loans may be used for purchases or refinances.

In other words, a veterans buying a new home can finance renovations like new flooring and cabinets into their VA loan. Additionally, any VA required repairs may also be financed via the VA escrow holdback loan! Veterans who already own a home can refinance into a VA Renovation Loan and finance home improvement projects like flooring, a new roof and more!

Future value is the backbone of the VA Renovation loan.  VA appraiser‘s forecast a home’s value on VA Escrow Holdback Renovation loans. In short, future value equals a homes value after repairs & improvements are completed.  However, the appraiser gives a concrete future value long before any renovation work begins.

Hence the name – “future value.”  Future value gives veterans access to future equity before they have it.  As a result, veterans leverage their future equity to finance repair and improvement costs.  For example, let’s assume the following:

  • Home is worth $300,000 before improvements
  • VA appraiser values home at $400,000 once specific improvements are completed

As a result, this home is valued at $400,000 on a VA Escrow Holdback Renovation loan.

VA Escrow Holdback Loan Rules

  • Purchases and refinances allowed
  • $1,000,000 maximum loan amount
  • 90 days to complete work
  • Repair costs up to 25% of future value allowed
  • Maximum of 3 contractors
  • 0% down – equity required (applies to local conforming loan amounts)

Learn more about VA Home Loans

Eligible VA Escrow Holdback Loan Repairs & Improvements

VA Escrow Holdback Renovation loans allow different types of repairs.  For example:

  • Roof repair
  • Insulation & Siding
  • Paint
  • Kitchen updates
  • Electrica, plumbing & septic
  • HVAC
  • Repair in-ground pools
  • Install or repair driveways
  • Flooring
  • Termite treatment
  • Foundation Repair

Apply for a VA Home Loan

Veterans finally have a home loan that helps them renovate their home.  Funding renovation costs with a VA Escrow Holdback Renovation loan improves the condition and value of a veteran’s home without the out of pocket expenses associated with a rehab.

By Jeremy House

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