VA loans

VA Loan Reader Questions: Buying Land With a VA Loan

November 13, 2018

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VA Loan Reader Questions: Buying Land With a VA Loan

va loanA reader asked us, “Can I use a VA loan to buy land for building property?”

There are two sections of the VA loan rules which offer guidance for the eligible uses of VA loans, including buying land. One is Chapter 3 of the VA Lender’s Handbook, which states the following in Section 2, Eligible Loan Purposes:

“The law authorizes VA to guarantee loans made to eligible veterans only for the following purposes,” which include, “to purchase or construct a residence, including a condominium or cooperative unit, to be owned and occupied by the veteran as a home.”

Some private company VA loan websites erroneously report, “The VA home loan cannot be used to purchase vacant land. As per the US Department of Veteran Affairs regulations, the VA loan can only be used for an existing dwelling.”

This is not true, as per Chapter 3, Section 2 of the VA Lender’s Handbook, which states, “the loan may include simultaneous purchase of the land on which the residence is situated or will be situated.”

The other VA loan rules that apply for this issue are the rules for VA appraisals. VA Appraisal Guidelines, page 11 Section 3 states, “Dwellings where construction has not started or is under construction but not complete to the customer preference stage are considered proposed construction.  A home may be appraised from plans and specifications or a model home.”

It’s important to note that the appraisal requires a dwelling to be appraised, proposed or existing. Without a VA appraisal, there can be no VA loan.

VA loan rules do not allow purchase of undeveloped land or vacant lots all by themselves–any purchase of such property must be in conjunction with a construction loan. The borrower cannot buy land with a VA loan with non-specific plans to develop the land “sometime in the future.”

30 Comments
  1. jackie allen

    how long does one have before a house must be built?can it be a small cabin?

  • kody stahl

    i would like to get a va loan to purchase a 350 acre farm. is it possible or not? i have heard yes and no.... the farm already has a house on it.

    • Joe Wallace

      VA loan rules do allow the purchase of a farm, however, Chapter 7 of the VA Lender's Handbook says: ""The loan cannot cover: the nonresidential value of farm land in excess of the homesite, the barn, silo, or other outbuildings necessary to the operation of the farm"

  • Mike

    I found an architect that ships prefabricated homes nationwide and would like to purchase a plot of land on which to have such a dwelling. Would all this be possible with VA?

  • Robert Hernandez

    Is it possible to get a v a loan to buy 24 acres with small cabin water and electric for hunting and livestock grazing.

  • chris Hannas

    I'm a Realtor and want to know if a veteran can purchase a lot improved or unIimproved with a VA Loan and if so, what is the maximum loan amount for the lot? If there IS a maximum loan amount, can the veteran acquire a second mortgage to increase that land value over and above the maximum VA Loan amount. Example: List price $180,000, appraised value $180,000. VA Loan $100,000 second mortgage or "gift" of $80,000

  • Jonathan Evans

    Do you recommend any banks that work with VA construction loans?

  • STEVE GRIFFIN

    how long can the construction date be put out, i would like to purchase a 135 ac tract to build on in the future for my primary residence

  • Anthony

    I'm wanting to use my VA loan for 34 acres of timber/farm with a cabin. The cabin has electricity, no running water or bathroom. If I proposed to add on the necessary requirements, what is the TIME FRAME in which construction has to be begun. Can I get the loan today if I state that next year (Apr. 2014) I will begin the construction? Is 1 year too far out to make the "hunting cabin" VA approveable? I would like to buy the land now, pay on it for a year then do the work over the next year (vacation) to be liveable by 2014.

  • Michael

    Do I have to make a down payment of 20% if I want to purchase land with a construction loan or can I still get 100% financing?

  • Bridgette L Davidson

    I am interested in purchasing land, with an construction start date in 2020. Is this possible, if the buyer has plans to purchase the land asap.

  • Cristopher Deaton

    Would the va approve a loan for me to buy land (50 acres) and start building on it 01july2018?

  • Mike Tanner

    As a veteran, are VA loans available to purchase a titled lot in an RV resort.

  • Britt

    My family has a 200 acre farm with a house on it. Could I use my VA loan to buy the house and half the farm?

  • Kristen

    If our builder is not va-approved yet, is that a tedious process? We need to do two closings (lot then roll into construction) because we're waiting on blueprints, can the va loan be used for this situation? Thank you in advance, you have been very helpful!

  • Connie

    We want to purchase land and build a workshop (non commercial use) with a living area included. Would this qualify for a 0%down VA loan? Thanks for your reply.

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