VA Rehab/ Renovation Loans Dayton, OH

[Lindsay Plasencio]

Thanks in advance for reading my post and I'd greatly appreciate any advice/ recommendations that anyone can give me.

1. On VA Rehab/Renovation loans, do they allow for adding ceilings and drywall to basements (no additional rooms in basement, just adding drywall to the perimeter), do they allow the placement of 1 or 2 egress windows in the basement, and do they allow for the removal of non-load bearing walls (for example to open up a kitchen or extend a bathroom into extra space in a closet).

2. With regards to using second tier entitlements and the VA Rehab/Renovation loan, does the cost of the rehab being added to the purchase price count toward the $144k minimum (I used all my first tier entitlement on my previous home that I bought a couple duty stations ago and it is still on a VA loan and being rented out)? For example, could I purchase a home for $120k if the rehab would cost $24k (or more)? Or would I need to find a home with a purchase price of at least $144k (before the rehab cost)?

Background: I just moved to the Dayton, OH area and have been looking at purchasing a home for a few months now. specifically, I'm looking at homes in the Kettering High School, Centerville High School, and Beavercreek High School districts. It's definitely a seller's market right now and all the available homes within my price range need significant updating. Most homes on the market were built between 1940 and 1960 and most sellers have not done many, if any, updates to the homes. My intent with this home is to buy and hold. When I PCS, I intend to use it as a rental property. I also thought about renting it out when I deploy next year and purchasing another home when I return from deployment (basically repeating the process I am doing now, except I will be able to afford more upfront costs associated with different types of financing). I am single with no dependents, so I think I may be authorized to do that while deployed. Any input on turning it into permanent rental upon deploying would also be appreciated.

In doing some research, I came across the VA Rehab/Renovation loan. I think this loan would work the best for me because of the little amount required to pay upfront at closing. I want to get some general information before I pick a lender.

However, as I'm sure you all know, VA loans have more strict requirements than conventional financing and typically take longer to close. I'm running into an issue where most homes that fit what I'm looking for in a rehab property will not accept VA loans. According to my realtor, most want conventional financing only or some even say they will take FHA (which is kind of similar to the VA loan as far as requirements according to my research). I looked into the FHA 203k loan, but it seems like there would be a lot of up front costs that I am not currently able to pay. If anyone has any ideas on other loan options that wouldn't require a lot of upfront costs, I'd be willing to investigate that!

Again, thanks in advance for your thoughts and input!

-Lindsay