Skip to Content

What You Can (and Cannot) Do With Your VA Loan

VA loans are meant for purchasing, building or refinancing a home. However, there are a handful on non-acceptable uses. The list isn’t long, but important for anyone considering VA-financing.


America owes much to her Veterans, who put their lives on the line for their country.

It’s a debt that cannot possibly be repaid. But it can be appreciated in a tangible way, which is why we, as a nation, created the VA mortgage program.

This is an amazing program that has allowed more than 24 million veterans and active military families to purchase a home since 1944. VA mortgages come with no down payment, no private mortgage insurance and competitive rates. They’ve also made homeownership possible for scores of service members who might otherwise struggle to secure financing.

But even this remarkable program has limitations, beyond the standard caveats and guidelines concerning eligibility, credit and underwriting.

Here we dive into acceptable uses for VA loans – including some of the more unique topics, like using a VA loan for land or even a tiny home.

VA Loan Uses

Let's start with an overview of what VA loans can be used for.

Qualified borrowers can use VA-guaranteed financing to:

  • Buy an existing home, or purchase a townhouse or condominium unit in a project that has been approved by the VA
  • Purchase a multi-unit property (up to a four-plex), provided you occupy one of the units as your primary residence
  • Build a home (It can be tough to find VA lenders willing to make true $0 down construction loans; Veterans United doesn't currently provide construction financing)
  • Refinance your existing VA loan into a lower rate or out of an adjustable-rate mortgage
  • Refinance a non-VA loan into the VA loan program
  • Purchase or refinance and include qualified energy efficiency improvements with a VA Energy Efficient Mortgage
  • Buy a manufactured (mobile) home and/or lot, buy and improve a lot on which to place a manufactured home which you already own and occupy or refinance a manufactured home loan in order to acquire a lot
  • Refinance into a lower interest rate and/or extract cash from equity
  • Technically speaking, it is also possible to finance a tiny home with a VA loan as long as it meets VA and lender guidelines. A big consideration will be whether there are good, recent comparable home sales to support the appraisal

Can You Buy Land with a VA Loan?

It is possible to buy land with a VA loan if the land is where a home is or will be situated. But you cannot buy land with no immediate plans of construction.

What’s more, it can be tough to find a VA lender willing to lend on a construction loan. Instead, many veteran homebuyers looking to build, finance the new construction with a local institution, then refinance the loan on the newly built home into the VA loan program with a VA Cash-Out refinance loan.

You can learn more about VA land loans here

You cannot use VA-guaranteed financing to:

The reality is there are simply some things you can and cannot do with a VA loan, such as:

  • Purchase investment property
  • Use as a business loan
  • Buy farm land that does not contain a residence the veteran occupies as a home
  • Purchase a home in a foreign country
  • Purchase a second home

These short rundowns aren't exhaustive, but they do represent the spirit of the program. This is for purchasing primary residences that you'll live in full time, not for vacation homes or rental properties.

Being able to purchase with no down payment is an incredible benefit, and the VA wants to ensure that qualified borrowers are using this program to achieve the dream of homeownership.

Why Use a VA Loan

While it may not be for everyone, a VA mortgage remains an amazing opportunity.

About 8 in 10 VA homebuyers purchase with no money down. Despite that flexibility, these loans have had the lowest foreclosure rate of any loan product for nearly all of the last five years. VA lenders are generally looking for at least a 620 credit score, which is well below what you'd typically need for conventional financing (and that's typically going to come with a down payment of at least 5 percent).

Best of all, even in these tough economic times when traditional financing has become difficult to secure, VA mortgages are still making homeownership a reality for the men and women to whom America owes so much.