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VA Loan for Home Improvement

by M Hall
(Post Falls, Idaho)

My son wants to add an in law apartment to his existing home. His home is not on a VA loan but his mother-in-law is a widow of a 100 percent disability veteran and she would want to use her VA entitlement to do the loan.

Can this be done if she has an existing VA loan? She is trying to get someone to assume her existing VA loan so she can move and do the new loan.


Hello Ms. Hall,

Thank you for taking the time to browse my website and ask a question.

As I look over your question, what comes to my mind is the fact that, to my knowledge, VA does not offer home improvement loans.

FHA does have what is called a 203K loan program that allows for money to be borrowed to make improvements to the home. Usually this is when the initial purchase is being made and the home needs work to get it ready to live in.

The second strike against her is the fact that there is very likely a 1st mortgage on the house already which is probably held by your son. This would prevent most lenders from loaning money on the home unless there is plenty of equity in the home and the new lender can take a second mortgage position. Second mortgages are very hard to find these days since so many of them lost money in the recent mortgage crisis.

Now when we consider the fact that your sons mother-in-law has a VA mortgage, if it's assumable, then she could sell the house after the buyer gets qualified. I think he/she would have to be a Veteran also to assume the loan.

I know much of what I'm saying is not what you want to hear, but with the years of experience in the mortgage business, I never encountered a situation like this one.

The VA loan is a great loan product for those that qualify. However it just cannot be used the way you described in your question.

I'm sorry this answer does not get your family where they want to go. My best solution would be to see if your son has enough equity to get a line of credit large enough to make the home improvements after his mother-in-law gets her house sold.

Then perhaps she can pay off the equity line with the proceeds from the sale of her house.

I wish you all the best. Please pay it forward and tell others about my website.



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VA Home Improvement Loan

by Jesse P.
(Portsmouth VA)

I already have a VA home loan, can I get a VA home improvement loan to add on another room, or upgrade my kitchen or garage?


Hello Jesse,

Good question here. However with the VA home improvement loan, it has to be used for energy efficient improvements only.

Examples of that would be:

Upgrades to heating and cooling systems, this could include solar powered systems.

Doing insulation and caulking

Installing storm windows and doors

Adding energy-efficient thermostats

As well as other energy-efficient renovations on which the you and the lender agree upon.

I know this is not what you want to here because it appears you want to add on to your house.

I'm afraid that what you want to do does not fall within the guidelines for this type of a loan.

Perhaps you could look at a equity loan or even a cash out refinance providing you have the equity to do so.

Thanks for stopping by my site.

Kind Regards,


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