Can You Use the VA Loan on Land?

We’ve been asked lately a lot of questions around using the VA loan and trying to buy land, be that to buy land and build a home or let’s say you just want to buy land for hunting ground.

We’ve been asked about that one just to go out recreational shoot or buy land and hey, in the long run, I want to use it for development or investment, all those kinds of things.

So, I just want to help dispel a myth of what you can use a VA loan for, and how does it really pertain to buying land.

Because, some folks are getting told flat out, outright – ‘no, you cannot use a VA loan on land, period.’

And I’d say, well, it kind of depends.

It’s like you got to put a little asterisk there, because you got to first know – what kind of land are you trying to buy? And then kind of apply it.

Is a VA loan? Will it work for the situation?

So just looking at the VA loan in general, it applies for anyone trying to buy a primary residence.

So think of it this way – if you’re going to use a VA loan to go buy something, and land is part of a home, it’s actually a key central component of a VA loan, because it says you got to own the land, you just got to know – am I going to live there?

Primary residence means you plan on living there for the majority of your time, it’s your main home, it’s where you’re probably have your mail sent to, it’s a place you’re going to put on your tax returns, that kind of stuff.

So when you’re asking yourself, hey, I want to use a VA loan and I want to go buy land. Well, I just ask right up front, number one, do you plan on living there?

And then if you tell me yes, hey, we plan on living there, Evan – wonderful. That generally means that you’re going to use it as a primary residence.

Now for buying raw land or let’s say it’s that hunting land that people want, again rather than saying flat out no, I ask the question of is it going to be your primary residence? Well, yeah, I intend on living there – wonderful.

So, there must be ideally a structure on there, an actual home, ideally a home with walls and beds and all that good kind of stuff because the key is to be a primary residence, you have to have a habitable home that you can go live in.

Now the VA loan also, we have it on some of our YouTube videos and things that we discuss about, like, the VA loan just has some general habitability concerns.

Meaning you got to make sure that the home is habitable and you can live in it.

You can’t just get a shack that doesn’t have running water, torn down, XYZ, rotting wood, all that kind of stuff.

It’s got to be a place that you can live and is reasonable, it’s also got to be a place that has some related comparable homes around it.

But when folks say, hey, can I get land, it’s just primary residence and then also, do you have a home on there that is habitable, and you can actually live in?

So, if you do want the hunting ground, well, if there’s a reasonable house and it’s on decent acreage where you can do that or it’s backed up to something where you can do that hunting, that’s very doable.

The key is it’s got to be a primary residence and it’s got to be conforming with the area as having a single-family residence on it, which we help folks get homes with land and acreage all the time.

Now on top of that, if it doesn’t have a home that doesn’t necessarily mean that the VA loan writes it off, right?

And remember this too, a lot of folks will tell you yes, no, what you can and can’t do with the VA loan – remember this, the VA doesn’t actually fund loans.

So, when you say oh hey, the VA Veterans Affairs has decided to deny me or I can’t do it – that’s not necessarily true. They don’t actually fund loans and say yes or no, approving or denying your loan.

We got some other good videos that help discuss how really it’s lenders – we technically choose.

The VA just gives us like a guarantee, they say “hey, Evan, WeVett Home Loans, you guys meet these minimum criteria, we’ll guarantee this loan, we’ll cover up to so much of the loan value for if there’s any losses” – that’s all it is.

So really a lot of times if you hear a lender telling you “hey, you can’t go build a home” or “you can’t buy land” – that might be lender specific.

Now if it’s raw, raw land – meaning you plan on buying it and you just want to hold it for years and there’s no home on it or anything. It’s undeveloped lots. Or you want to go buy that 40, 80, 120-acre hunting ground that you have and there’s nothing on it – no home, nothing.

That really can’t count as a primary residence and you’re not intended on living there anyways – yeah, that won’t really fly for the VA loan. Like, that’s just something at a even bare minimum requirement – VA loan needs to be primary residence. Won’t fly.

The scenario that we hear of a lot of folks lately that do get denied or other lenders are telling them “hey you can’t do this with a VA loan” generally revolves around construction and buying land and trying to build something on the home and that is something that is possible with the VA loan.

The VA loan will fully allow new construction and there’s a few different ways that can be done.

But not all lenders work with that. And that’s what you got to know actually majority of lenders, that at least I’m aware of, won’t touch what we call one-time construction loans.

That’s where, the land, there’s no home on it.

But you want to buy the land.

And you want to build the house right away on that land.

And you’ve got the plans, everything set up to run.

And you want to use a VA loan.

The VA will fully guarantee that type of construction loan called a one-time construction loan. It’s where we fund it up front, you close it, they build it, and on you go. You got your permanent financing.

Meaning, you don’t have to redo a finance loan again.

Because sometimes in construction, they say you need a construction loan – which will generally be short term and pay directly to the contractor. And then you get permanent financing after that.

Where you’ll think of, traditionally, your 30-year locked VA loan, let’s say, at that point then. But you can do one-time construction loans with the VA loan.

Meaning that you fund it for the construction, and then you already have your 30-year after that.

Very unique product that we also discuss in other places, but it kind of goes back around to making sure we’re staying focused on that land discussion.

You can buy completely raw land and put a home on it and plan on putting a home on it and utilize a VA loan to do so. You just got to have a lender who gets it and works with that.

So that dispelled a little bit of the myth of ‘can I use a VA loan to buy land?‘ – and the flat answer of ‘no’, I’d argue it depends a little bit.

Let’s find out what your scenario is what you’re trying to do and then if you’re buying it and you’re trying to, again, build your primary residence, your future home on it.

Like for example, we work with a lot of folks who are transitioning out of the military. I mean active duty military. That’s our bread and butter. A lot of folks that we work with are active duty, and then of course veterans outside of that.

But there’s that in between transitioning off that we just have like another unique niche within that we get to work with a lot. And we start planning hey how can we utilize a VA loan to buy that land and build the home we want.

Now know if you’re transitioning and watching this video, or plan to transition off active duty and you’re going to retire and work civilian or whatever it might be, or just retire in general, know that there’s some nuances there that you got to be aware of.

And we’ll hit those in other videos as well on talking about the transition stage because your income and all that gets really interesting and I like to say, really wonky, that you got to pay attention to.

But it is possible to buy land and build the home you want on it as your transition out and make it happen. And that’s a scenario where we often see folks wanting to utilize the one-time construction loan with a VA loan.

Or, you’re already out and you want to buy that land to build your dream house on.

It’s doable.

So, know this you want your hunting ground where you can go shoot with all your buddies and stuff – that won’t really fly with a VA loan.

You just want to buy raw land that you want to just sit on, you’re speculating, hoping it’s going to go up – won’t happen.

Just think in your head at the very beginning ‘what can I use a VA loan for?‘ – a primary residence.

Meaning, you got to plan on living there. That’s the key.

So just know if I plan on live in there there’s a good chance of VA loans going to work for this.

Hopefully, I dispelled some of the myths around land, and just know that a lot of VA loan things are really heavily lender dependent.

My name’s Evan Kaufman, again more than happy to help you. Our goal is to help you go out and win a home with the VA loan. Take care.