Hard money to VA loan?
6 Replies
Andrew Astorga
from Jacksonville, Florida
posted about 2 years ago
So I am trying to see if some one has done hard money to va loan. Pros and cons, or can I even do that?
Trenton Miller
Specialist from Orange County & Los Angeles, CA
replied about 2 years ago
Are you using hard money as capital for a fix and flip? The only reason I ask is pertaining to the condition of the home. VA will NOT fund homes in poor condition. With that being said, VA mortgages ARE assumable.
Andrew Astorga
from Jacksonville, Florida
replied about 2 years ago
I was thinking BRRR
Looking at pre foreclosure and might come across a place that I need to close fast and or need repairs to get it to a va standard
Trenton Miller
Specialist from Orange County & Los Angeles, CA
replied about 2 years ago
Originally posted by @Andrew Astorga :
@Trenton Miller
I was thinking BRRR
Looking at pre foreclosure and might come across a place that I need to close fast and or need repairs to get it to a va standard
Got it. You're all over it then. Im sure you can find a way to do this. I would suggest meeting with a mortgage broker and figuring out what you will be approved for first. Use this information to then better determine what you can afford, moving forward into a conventional mortgage. Hope this helps.
Chris Mason
(Moderator) -
Lender from Oakland, CA
replied about 2 years ago
Originally posted by @Andrew Astorga :@Trenton Miller
I was thinking BRRR
Looking at pre foreclosure and might come across a place that I need to close fast and or need repairs to get it to a va standard
Yup this is totally doable. A few things that you will see, just so you're not surprised by them.
- The VA funding fee funds the entire VA loan program (and you taxpayers thought you were on the hook for this didn't you?). Applies even on a refinance unless you're service related disabled. 2.15% of loan balance, tacked onto loan balance, is the norm. So if you were $500k in HML debt, you are now going to be over $510k in VA loan debt.
- Section 1 of the pest report will need to be cleared. So as you're getting your bids in for various things anyways, include a termite place so you can see what those section 1 items are and get them done alongside the rest. Then you gotta pay again for them to come back out and verify it's all done, but do this right before you refi so the clearance doesn't expire. Actually I just remembered - I only do loans in California, mostly Bay Area, so I don't have a reason to know if Sec1 w/ VA is a CA-specific thing or not.
- Like the other poster said, go talk to a local mortgage broker now so that you aren't surprised by VA loan requirements down the road. At least once a week someone from this very website contacts me to refinance out of a HML and either can't, or is surprised, by something.
S/F.
Andrew Astorga
from Jacksonville, Florida
replied about 2 years ago
thank for the insight
Diana Muresan
Lender from Chicago, IL
replied about 2 years ago
@Andrew Astorga if the property needs repairs and will not meet the VA appraisal, you can do a renovation loan with a limited or standard 203k FHA renovation loan and you can refinance it as a VA once reno is done