Hard money to VA loan?

6 Replies

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.

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.

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.