VA Loans For Home Repairs?
A reader asks us, “I am a widow of a retired veteran. My deceased husband only used part of his VA loan to purchase a house…can I use the rest of his eligibility for home repairs?”
There are two ways to answer this reader question about VA loan eligibility. The literal answer to the question is that a new purchase VA home loan is only intended to buy, build, or buy and renovate a home. There is no provision for a VA insured personal loan, even to renovate property. A VA home loan must be used to purchase, build, purchase and renovate, or refinance a home.
However, there are options a borrower in this situation may have depending on whether the surviving spouse qualifies under VA loan rules. Refinancing may be an option in some cases if the borrower is qualified.
According to the VA official site, “The unmarried surviving spouse of a veteran who died on active duty or as the result of a service-connected disability is eligible for the home loan benefit.” This means that the qualified spouse could apply for a new purchase VA home loan–but the applicant needs to contact the Atlanta Eligibility Center for more information on how to request eligibility and VA loan entitlement.
The VA official site adds, “…a surviving spouse who obtained a VA home loan with the veteran prior to his or her death (regardless of the cause of death), may obtain a VA guaranteed interest rate reduction refinance loan. For more information, contact our Atlanta Eligibility Center.”
This would allow the spouse to apply for a VA energy-efficient mortgage refinancing loan which allows VA-approved repairs and upgrades that result in greater energy efficiency in the home.
VA rules for surviving spouses and home loan eligibility are as follows, as written in the VA Lender’s Handbook Chapter Two, Section Five:
“Some spouses of veterans may have home loan eligibility. They are:
• the unmarried surviving spouse of a veteran who died as a result of service or service-connected causes,
• the surviving spouse of a veteran who dies on active duty or from service-connected causes, who remarries on or after age 57 and on or after December 16, 2003, and
• the spouse of an active duty member who is listed as missing in action (MIA) or a prisoner of war (POW) for at least 90 days. Eligibility under this MIA/POW provision is limited to one-time use only.”
For specific VA loan products such as IRRRLs or Cash-Out Refinancing Loans, contact the Department of Veterans Affairs to learn more about eligibility and procedures needed to apply.
About Joe Wallace
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association.