VA Renovation Loans for Home Improvements

A VA renovation loan is a special type of VA home loan that lets eligible veterans and active-duty service members finance both the purchase (or refinance) of a home and the cost of renovations in a single mortgage.

According to a Statista survey, about 69 percent of homeowners made interior remodels in 2024. So, if you’re looking to buy a home that needs a little work—or upgrade the one you already own—you’re not alone, and a VA renovation loan could be the perfect solution.

This benefit allows you to roll the cost of repairs or updates into your VA home loan, so you can finance both the purchase and the improvements in one package. Below, we’ll break down how these loans work and what the benefits are.

What Is a VA Renovation Loan?

A VA renovation loan—also known as a VA rehab loan—combines a standard VA mortgage with additional funds for home repairs. Your loan amount is based on the home’s “as-completed” value—what it’s expected to be worth after improvements are finished.

For example, if you find a home with great bones but outdated systems, you can use a VA renovation loan to cover both the purchase price and the money you need to modernize it and make it home. Once approved, the lender releases renovation funds in stages as the work is completed.

This is a great way to make financing your dream home simpler and more affordable—rather than juggling separate loans.

Who Qualifies for a VA Renovation Loan?

VA renovation loans have the same service-based eligibility requirements as a VA loan, and some additional specifics regarding the renovations at hand.

To qualify for a VA loan, you’ll need to meet the same service-based eligibility requirements as any VA loan:

Service-based criteria for VA loans:

• 90 consecutive days of active-duty service during wartime
• 181 consecutive days of active-duty service during peacetime
• 90 days in the National Guard and Reserves since August 2, 1990, or 6 years in the Selected Reserve or National Guard
• Surviving spouses of service members who are missing in action, prisoners of war, or have died during active-duty service or as a result of a service-related injury

You must also use the property as your primary residence.

In addition, VA renovation loans have a few specific rules:

• The property must be eligible for the program: 1-4 unit, owner-occupied, etc.
• The renovations must generally improve livability, safety, or efficiency — cosmetic-only or luxury add-ons may be restricted.
• There is a limit to what kinds of structural work or upgrades qualify: major additions, pools, detached garages may not qualify.
• You’ll need a contractor’s detailed bids and an appraisal estimating the “as-completed” value of the home after renovations.
• The work typically must be completed within a designated timeframe after closing (for example within 60–120 days). 

The VA’s Lender’s Handbook outlines specific property and appraisal standards for renovation loans.

What Improvements Are Allowed for a VA Renovation Loan?

Here’s a breakdown of what you can and what you can’t typically do under a VA renovation loan—always check with your lender for the specifics, as programs vary by lender.

What you can do with a VA renovation loan

• Replace or repair windows, doors or siding. 
• Replace roof, gutters or downspouts.
• Upgrade HVAC, water heaters, electrical/plumbing systems to bring up livability and safety.
• Improve insulation, weatherization, energy efficiency. 
• Finish basement (non-structural), add decks/patios (depending on program). 
• Make accessibility modifications (ramps, widened doors) to enhance usability for occupants with special needs. 

What you can’t do with a VA renovation loan (or is limited)

• Major structural additions (new floor, full-scale room addition) are often not covered.
• Detached garages, pools, luxury landscaping (in many cases) are excluded.
• Work must be completed within the defined timeframe or the loan risks non-compliance.

What Are the Benefits of VA Renovation Loans?

The biggest advantage of VA renovation loans is simplicity: One loan, one monthly payment, and one closing process. That alone can save you both time and money compared to taking out multiple loans. 

You’ll also enjoy the standard VA loan benefits:

• Zero down payment in most cases
• No PMI (private mortgage insurance)
• Competitive interest rates backed by the VA guarantee
• Potential to increase home value and build equity faster

If you’re purchasing, VA renovation loans allow for more housing options. You don’t have to rule out older homes that need work; instead, you can buy at a lower price and invest in upgrades that suit your needs.

Considerations Before Applying

While these loans can be a great fit, they’re a bit more complex than a standard VA mortgage. You’ll need contractor bids, renovation plans, and an “as-completed” appraisal before closing. Not all lenders offer VA renovation loans, so finding one with experience in this area is key.

It’s also important to stay realistic about timelines and costs. The VA expects renovations to be completed promptly after closing, and over-improving the property beyond neighborhood values can reduce your return on investment.

Working with a lender who understands the process—and can guide you through the documentation and appraisal requirements—makes a big difference.

Why Work With Commander Mortgage?

At Commander Mortgage, we specialize in helping veterans and active-duty service members get the most out of their home financing benefits. Our team has deep experience with VA renovation loans and can help you:

• Verify eligibility and obtain your COE
• Understand which renovations qualify
• Coordinate contractor documentation and appraisals
• Streamline closing so your renovations can start on schedule

We handle the details, so you can focus on turning your house into the home you envisioned.

FAQs

Can I use a VA renovation loan to refinance my current home?
Yes. VA renovation loans can be used for both purchases and refinances, as long as the home will remain your primary residence.

Are luxury upgrades allowed?
No. Pools, detached garages, and similar luxury projects are typically not eligible.

How long do renovations take?
Timelines vary, but most lenders require work to be completed within 60–120 days of closing.

Do I need a VA-approved contractor?
Yes, contractors must be licensed and meet your lender’s approval requirements.

The Bottom Line

A VA renovation loan is one of the most powerful tools available to veterans and service members who want to buy or improve a home. It simplifies financing, preserves your VA benefits, and helps you build equity while creating a space that truly feels like yours.

If you’re ready to explore your options, the experts at Commander Mortgage can help you determine eligibility, estimate renovation costs, and guide you from application to move-in.

Contact us today to see how a VA renovation loan can bring your home goals to life.

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