VA loans offer a powerful pathway to homeownership with unique benefits like zero down payment and competitive interest rates. But, not every property qualifies for VA financing, and different types of properties come with specific rules.
In this guide, we’ll explore the types of properties you can and can’t buy with a VA loan, while also shedding light on special scenarios like tiny homes, fixer-uppers, and land purchases.
VA Loan Eligible Property Types
When it comes to eligible property types, the two most important things to remember are:
- VA loans are intended to help eligible veterans purchase a home they plan to live in.
- All homes financed with a VA home loan must meet the minimum property requirements (MPRs) set by the VA.
With that in mind, let’s take a look at some eligible property types for VA home loans.
| Property Type | VA Loan Eligible? |
| Single Family Homes | Yes |
| Multi-Family Homes/Duplexes | Yes, if borrower occupies one of the units |
| Condos | Yes |
| Manufactured Home | Yes |
| Barndominiums | Yes |
| Shouse | Yes |
| Tiny Home | Yes |
| Home Construction | Yes, but may be hard to find a lender willing to finance a home construction |
| Newly Built Homes (houses < a year old) | Yes |
| Land | Yes, but must build on the land immediately |
| Investment Properties | No |
| Fixer-Uppers | Yes |
VA Loans for Multifamily and Investment Properties
VA loans can be used to purchase multifamily homes as long as the veteran borrower intends to live in one of the units as their primary residence. This requirement ensures that the property serves as the veteran’s home, rather than solely as an investment. While rental income from additional units can help offset mortgage costs, the primary purpose of the loan must align with the VA’s occupancy standards.
VA Loans for Land
VA loans can’t be used for land alone. However, you may be able to find a lender willing to finance an undeveloped piece of land as long as the veteran plans to start construction on the property immediately.
In order to do this, you need to use a VA construction loan.
VA Construction Loans
VA construction loans are available, but they can be challenging to find. Many lenders shy away from offering them due to their complexity and the numerous steps involved. Builders, plans, and construction sites must meet VA requirements, and the process includes managing staged disbursements, multiple inspections, and ensuring compliance with strict VA standards. For these reasons, many lenders prefer simpler loan products.
If you’re having trouble locating a lender that offers VA construction loans, consider this alternative: secure a conventional construction loan to finance the building process. Once the home is complete, refinance into a VA loan. This allows you to take advantage of your VA benefits for the long term while navigating the construction phase more easily.
While the process may involve additional steps, this approach ensures you can still leverage the benefits of a VA loan for your dream home.
New Construction (homes < a year old) and VA Loans
A house completed less than one year ago and has never been occupied is considered new construction.
A newly constructed home is eligible for a VA loan if it meets one of the following criteria:
- It must be 100% complete, except for customer-preference items, such as appliances, countertops and flooring.
- The home is covered by a one-year VA builder’s warranty
- The home is enrolled in a U.S. Department of Housing and Urban Development-accepted 10-year insured protection plan
- The veteran acted as the general contractor in the construction of the home and will be living in the home
VA-Approved Condos
The Department of Veterans Affairs must approve a condominium development before a VA loan can be used to purchase one of the units.
The VA maintains a list of approved condo complexes. If you don’t find your condo complex on the list, you’ll need to work with a VA-approved lender, and the development will need to go through the VA approval process.
This includes reviewing the complex’s organizational documents and bylaws, homeowner’s association policies, budget and finances, parking availability, and more. Certain condo rules—like restrictions on when or how units can be sold—can impact the property’s future marketability and cause the development to be ineligible for VA financing.
VA Loans for Manufactured and Mobile Homes
Manufactured homes are eligible for VA loans as long as they are attached to a permanent foundation and are taxed as real estate. Any manufactured home taxed as a motor vehicle or similar classification would make it ineligible for VA financing.
Even though they’re often used interchangeably, manufactured homes and mobile homes are different. The key difference is when they were built. Mobile homes were built before June 15, 1976, and do not meet the safety standards set by the Department of Housing and Urban Development (HUD). Manufactured homes, built on or after that date, comply with these standards.
Because mobile homes don’t meet HUD requirements, they are not eligible for VA loans.
Acquiring a VA loan for a manufactured home can prove challenging, as lenders may be hesitant to provide financing. Manufactured homes tend not to appreciate as much in value and have a shorter lifespan than modular homes and other traditional home types.
VA Loans for Modular Homes or Prefabricated Homes
Modular homes are built off-site and are then disassembled, transferred to the home location and rebuilt on-site. This is often a more efficient and economical way to build a home. Modular homes tend to be sturdier than mobile homes and often appreciate more over time.
Modular and prefabricated homes are treated like most traditionally built homes. So, they’re eligible for VA loans, and it is easier to find a lender that will back a home loan on a prefabricated house as opposed to a manufactured home.
Like manufactured homes, modular homes must have a permanent foundation and must meet HUD guidelines.
VA Loans for Barndominiums and Shouses
Financing a barndominium or shouse with a VA loan is perfectly acceptable as long as it meets all the minimum property requirements set by the VA. With barndominiums and shouses in particular, you’ll need to make sure there is enough square footage for basic living needs, proper heating and cooling, a roof that is built to last, and that it meets local zoning codes.
A barndominium or a shouse can be a great option for veterans looking to purchase or build a home with significant square footage but a more affordable price than a traditional home.
VA Loans for Tiny Homes
VA loans can be used to finance tiny homes that:
- Are at least 400 square feet
- Are attached to a permanent foundation
- Include adequate room for living, sleeping, cooking, and sanitary facilities
- Meet all other Minimum Property Requirements (MPRs)
Appraisals for tiny homes can also be challenging. Because tiny homes are less common, appraisers may have difficulty finding comparable sales in the area, which could extend the appraisal timeline.
VA Loans for Fixer-Uppers
While VA loans are primarily designed for move-in-ready homes, they can also be used for fixer-uppers under specific conditions. Veterans interested in purchasing a home that needs repairs can utilize the VA Renovation Loan program, which combines the cost of the home and necessary renovations into a single loan.
After the renovations are complete, the property must still meet the VA’s MPRs. Additionally, you’ll need a VA-approved contractor to outline the scope of work and estimated costs before loan approval.
This option is ideal for veterans looking to customize a home while leveraging the benefits of VA financing. However, it can be difficult to find a lender that offers them.
VA Loan Minimum Property Requirements (MPRs)
Before the VA will guarantee a home loan, the property must go through a VA appraisal to ensure it meets minimum property requirements and is priced appropriately.
Like a regular appraisal, a VA appraisal establishes the value of the home based on factors such as its location, condition, size, and comparable sales in the area. However, unlike standard appraisals, VA appraisals also evaluate whether the property meets the VA’s Minimum Property Requirements (MPRs).
For the most part, VA minimum property requirements are common sense. However, there are some specific requirements regarding property value and safety that set VA-approved properties apart.
Minimum property requirements for VA loans include property accessibility, space requirements, and proper mechanical system function.
9 Types of Ineligible VA Properties
If any of the following conditions apply, a property is ineligible for VA financing:
1. Property can’t be made to meet MPRs
If a property doesn’t meet the VA’s Minimum Property Requirements (MPRs) during the appraisal process, repairs or improvements can often be made to bring the home up to standard, and a reappraisal may be ordered. However, if the home’s condition is so poor that it cannot reasonably be brought into compliance, or if the seller is unwilling to make the necessary changes, the property will be ineligible for a VA loan.
2. Located in a Flood Hazard Area Where Flood Insurance is Unavailable
Standard homeowner’s insurance doesn’t cover flood damage. If a property is in a high-risk flood zone and flood insurance isn’t available, the veteran could be left without help to rebuild after a flood. That’s why VA loan rules prevent buyers from purchasing homes in these areas.
3. Located in the Coastal Barrier Resource System
These are ecologically sensitive areas that are ineligible for federal expenditures and financial assistance. Since the VA loan is backed by the federal government, it can’t be used to purchase homes in those areas.
4. Located in a High Noise Area
Excessive noise—like that from a property located in a major airport’s highest noise zone—can disqualify a home from VA loan eligibility. It’s not just about being near an airport; it’s about extreme, potentially unsafe noise levels that impact livability and long-term marketability.
5. Located in Unapproved Condominium Developments
This limitation applies to virtually all types of mortgages. A condominium project is thoroughly analyzed and can be disqualified for issues such as too many non-owner occupied units, an insufficient budget or significant uncompleted common elements, among others.
6. Co-operatives
Condominiums and co-operatives are often used interchangeably, but they’re very different. With a condominium, you own the interior of your unit. With a co-op, you only own a share of the company that owns the entire building—which means you don’t legally own real estate.
Because of that, many lenders, including the VA, don’t allow co-op purchases. Without direct ownership of real property, it’s difficult for lenders to secure the home as collateral, making co-ops ineligible for VA financing.
7. Unimproved Land
As mentioned above, you cannot use a VA loan for the purchase of land unless you also plan to immediately build a home on the property.
8. Investment Properties or Vacation homes
VA loans are intended for personal primary residences, which means you can’t use one to buy a property you don’t plan to live in—like an investment property or vacation home.
However, you can use a VA loan to purchase a multi-unit property, such as a duplex, triplex, or fourplex, as long as you live in one of the units. This can be a great option for buyers who plan to rent out the additional units—or even the whole property down the road after a permanent change of station (PCS).
9. Farmsteads
Buying a farmstead, hobby farm, or homestead with a VA loan comes down to intent—and how the property is appraised. The VA loan can be used if your primary goal is to live in the home, not to farm the land for commercial or agricultural income.
That distinction matters during the appraisal process. The VA requires appraisers to assess the property based strictly on its residential value. That means barns, silos, livestock facilities, and other commercial or agricultural features won’t be included in the appraised value.
If a seller prices the property based on its full farm potential—but the VA appraisal comes in lower—the buyer may need to cover the difference out of pocket if the seller doesn’t negotiate. This is similar to how any purchase works when a home doesn’t appraise for the sale price.
Tip: Get a Home Inspection With a VA Loan
Home inspections aren’t required for VA loans. However, they’re highly recommended because they can uncover hidden issues that a VA appraisal won’t catch—such as roof damage, plumbing problems, electrical issues, or signs of mold or pests. That’s because an appraisal is primarily focused on determining the home’s value and ensuring it meets the VA’s Minimum Property Requirements (MPRs) for safety and habitability. In contrast, a home inspection offers a much more detailed evaluation of the property’s condition, helping buyers make informed decisions and avoid expensive surprises after closing.
Equal Housing Opportunity. The Department of Veterans Affairs affirmatively administers the VA Home Loan Program by assuring that all Veterans are given an equal opportunity to buy homes with VA assistance. Federal law requires all VA Home Loan Program participants – builders, brokers, and lenders offering housing for sale with VA financing – must comply with Fair Housing Laws and may not discriminate based on the race, color, religion, sex, handicap, familial status, or national origin of the Veteran.
Sources
VA Minimum Property Requirements
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rose steele says
can a veteran use his VA benefits to purchase a church?
Ryan Guina says
Hello Rose, the VA Loan benefit can only be used to purchase a primary residence. Best wishes!
Peter Powell says
Is there a problem in a purchase if the house is less than half the value of the land, barn and other outbuildings on a non-working farm property
Keith Fenton says
I am trying to buy a property that was a church rectory. I was pre-approved, got the home inspection and the appraisal done and now my lender is telling me I can’t use the VA loan for this property because it was a church. Now I am out almost 1,200 bucks. Is there anyway around this? The house is zoned as single family and has been since it was built in 1961.
[email protected] says
The requirements only seem fair given that buying a home is one of the biggest investments one can make and you want to be sure that everything is perfect.
stellagrace says
Very nice blog!Thanks for sharing…Personal loans without credit check can be a better choice than financing with credit cards.Personal loans without credit check have become a wildly popular form of loan.