VA Loan for Townhouses
VA loans give veterans, service members, and surviving spouses an accessible path to homeownership. With competitive interest rates, limited closing costs, no down payment, and no private mortgage insurance requirements, these loans have helped millions of Americans buy homes.
- Veterans, active-duty service members, and some surviving spouses are often eligible to buy a townhouse with a VA loan.
- The townhouse must meet the VA’s Minimum Property Requirements, and you must intend to use it as your primary residence.
- VA loans cover move-in-ready townhouses and may also finance certain repairs through renovation loans.
A VA townhouse loan can be an attractive mortgage option for veterans looking to buy a townhome. However, like condos, townhouses must meet specific requirements to qualify for VA financing. Veterans Guide can help you understand these criteria and guide you through your options.
Can You Buy a Townhouse With a VA Loan?
VA home loans help veterans, active-duty service members, and certain surviving spouses buy or refinance a home. Private lenders, such as banks and mortgage companies, provide the loans, and the VA guarantees a portion, allowing the lenders to offer more favorable terms.
Eligible individuals can use VA loans to purchase various types of residences, such as single-family houses and townhouses, as long as they meet the VA’s eligibility rules.
Eligibility Requirements for VA Loans on Townhouses
To be eligible for VA financing, townhouses must meet the VA’s Minimum Property Requirements. These requirements ensure that properties purchased with VA loans are safe and structurally sound. A VA-approved appraiser will confirm this during the loan process.
Additionally, you must intend to occupy the townhouse as your primary residence to receive VA financing. You may not use a VA loan to purchase a townhome solely for rental purposes. However, you may rent out part of the townhome while you live there.
The VA does not require a minimum credit score, so getting a home loan with bad credit is possible. However, the lender may have a credit score requirement to determine your eligibility.
How To Apply for a VA Loan To Purchase a Townhouse
Here’s a step-by-step look at the process of getting a townhouse loan through the VA:
- Pre-qualify: Work with a lender to estimate how much you can borrow based on your income, credit, and other factors. This step helps you set a realistic budget and shows sellers you’re a serious buyer.
- Obtain a Certificate of Eligibility, or COE: The COE verifies to lenders that you meet VA service requirements for the loan. You can apply online through the VA’s website or by mail using VA Form 26-1880. Your lender may also have the tools to verify eligibility on your behalf.
- Find a VA-approved lender: Not all lenders offer VA loans. Work with a VA-approved lender who understands the program’s requirements, then follow their application process.
- Complete an appraisal and inspection: Once you’ve made an offer, the VA requires an appraisal and inspection from an approved appraiser to determine the home’s value and confirm that it meets the Minimum Property Requirements.
- Finalize the closing process: After loan approval, you’ll review and sign final paperwork, pay any closing costs, and finalize the sale.
What To Consider When Buying a Townhouse With a VA Loan
Before you purchase a townhouse with a VA loan, there are a few key considerations to understand that could affect your financing or ownership experience.
First, the VA typically requires homes funded with VA loans to meet its Minimum Property Requirements. However, it also offers alteration and repair loans, which let you purchase a townhouse that needs work. The VA guarantees the lesser of the acquisition cost or the as-completed value determined by a VA appraiser.
Many townhouses are also part of a homeowners’ association, or HOA, which charges monthly fees for shared maintenance and amenities. VA-approved lenders typically factor HOA fees into your monthly housing expenses when determining how much you can borrow. Thus, higher HOA fees common among townhomes could reduce the loan amount you qualify for.
Most borrowers pay a one-time VA funding fee, which is a percentage of the total loan amount. You can finance this fee into your loan amount. Some individuals are exempt from paying the funding fee, including veterans receiving VA compensation for a service-connected disability.
Borrowers are subject to VA home loan limits, which establish the maximum loan amount the VA will guarantee based on your entitlement and location.
Frequently Asked Questions
Let’s explore some common questions and answers about VA funding for townhouses.
Can I Buy a Townhouse in a Multi-Unit Building With a VA Loan?
Yes. You may use a VA loan to buy a townhouse in a multi-unit building as long as you intend to live there. However, the VA may consider this a condo, so you may be subject to additional restrictions.
Are There Any Restrictions on the Condition of a Townhouse When Applying for a VA Loan?
Yes. The townhouse must meet the VA’s Minimum Property Requirements, which confirm the property is safe, structurally sound, and habitable. If any part of the house violates these requirements, the VA may require repairs before the loan can close.
How Can I Find Out if My Townhouse Is Eligible for a VA Loan?
Work with a VA-approved lender. They can help confirm whether the property meets VA home loan requirements and guide you through the approval process.
What if I Want To Buy a Townhouse in a Gated Community or With an HOA?
You can use a VA loan for properties in gated communities or with an HOA. Before you contact a lender, review the HOA’s fees to determine if they might impact the townhouse’s affordability.
Can I Use a VA Loan To Purchase a Townhouse as a First-Time Homebuyer?
Yes. VA loans are helpful for first-time homebuyers since they require no down payment or private mortgage insurance.
Make Your Dream Townhouse a Reality With a VA Loan
A VA townhouse loan can make buying your dream home more affordable. If you’re ready to explore your options, Veterans Guide provides personalized help navigating the loan process, including helping you complete the necessary VA forms.
Contact us today for a free consultation to take the first step toward buying your townhouse with a VA loan.
Client Reviews
ANN WILLIAMS SHELLY DONNETT'E Want to Increase Your VA Rating?
