Once you have made the decision to build a barndominium, you have a lot of choices to make. However, before you can really set things in stone, you have to secure the financing for your project. This can be a difficult part of the process, especially if you are working on a budget or are a first-time builder. Because of this, getting a barndominium VA loan could be an excellent option for you.
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Getting a barndominium VA loan is a great way to get the loan you need for your unique home. If you qualify for one of these loans, you can reap the benefits and make building your home affordable and easy. In this article, we have put together a complete guide to getting a barndominium VA loan. By understanding everything about these loans that you can, you can get started building your dream home.
What is a Barndominium VA Loan?
A barndominium VA loan is a loan that is offered to people who have served in the armed forces. The Department of Veterans Affairs is dedicated to helping people who have served their country. This happens in many different capacities, but they are focused on helping veterans in their day-to-day life. This can be with healthcare and with financial help to get the housing and financing that they need.
If you are a veteran, there are all kinds of ways you can benefit from the VA. However, one of the most helpful is with a VA loan. VA loans are designed to help veterans get financing for their homes. If you want to get a barndominium VA loan, knowing what goes into it is one of the best ways to get started.
Benefits of Using a Barndominium VA Loan
One of the main benefits of using a barndominium VA loan is that down payments are usually unnecessary. One of the hardest things about getting financing for any home is putting together a large down payment. However, if you qualify for a VA loan, you can either put down much less or nothing at all. This is one of the head starts the VA offers that can be incredibly helpful.
The other benefit of a barndominium VA loan is the lower interest rates. While interest rates change daily, you can generally count on a VA loan is less. For example, in January 2023, the interest rate of a barndominium VA loan was around 5.3 percent. A traditional mortgage had an interest rate of around 6.5 percent. However, it is essential to remember that these numbers are fluid and can change at a moment’s notice.
How to Get a Barndominium VA Loan
Before you can get a barndominium loan, you have to know what the process is like. There are several things you will have to consider when choosing a barndominium VA loan. One of the most important stems from the fact that loans have to be received through the VA itself. This can cause some issues when trying to get a loan for the construction of a home as opposed to buying one.
The VA has some stringent requirements, and getting a construction loan can be difficult. To help increase your chances, you should be as prepared as possible. Knowing the requirements is the best way to get the loan you need. Being ready to meet the qualifications will help you build your dream barndominium.
Know Your Eligibility
It should be noted that a barndominium VA loan will only be available to people who have served in the armed forces. However, even if you have, there are some other eligibility requirements. One of these is the fact that you need to have served for 90 days or more during active wartime. If you were enlisted during peacetime, this time is increased to 181 days.
You can also get a barndominium VA loan if you have served in the National Guard or Reserves. The time required for this is six months. You can also qualify for a barndominium VA loan if you are the spouse of someone who died while serving.
Make Sure Your Project Qualifies
Your project will also have to qualify specifically for a barndominium VA loan. For one, your barndominium has to have HVAC, electricity, and plumbing. It also must have a traditional roof that is built to last as long as any other roof. Plus, any attic space or crawl space has to be vented and usable, just like with a traditional house.
If you are going to get a barndominium VA loan, your home will also have size requirements. The floor plan for your barndo has to be at least 400 square feet. It should be noted, however, that most barndominium kits are at least 1,200 square feet. You can also not use any lead-based paint, which is recommended for most homes anyway.
Consider Loan Type Options
One of the things you need to consider when getting a barndominium VA loan is the fact that the VA doesn’t usually give construction loans. However, there are ways you can get around this. For example, you can get a construction loan through traditional means with a regular bank. These loans are usually good for one year, and then you have to move them over to a traditional mortgage.
If you choose this option, you can use a VA loan to repay your construction loan once the home is built. However, if you can qualify, you may be able to use the VA for your entire construction simply. If not, though, it is good to know that you have other options available to you.
Getting financing for your home can be extraordinarily difficult, no matter what. However, with a barndominium VA loan, you can avoid the massive down payments and high-interest rates. Because of this, they are a great option for first-time home builders. If you qualify, a barndominium VA loan can get you the financing you need.
If you would like more guides like this one, check out the rest of BarndominiumLoans.com. You will find all kinds of tips and tricks from the pros. You will also find individual state guides to help you finance a barndominium. With the correct information, you can build your perfect dream home.