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VA Renovation Loan Options for Home Improvements

A VA renovation loan combines the cost of repairs with a VA mortgage.

Barbara Marquand
Taylor Getler
Chris Jennings
Updated
A VA renovation loan allows you to buy a home and combine the cost of improvements with the mortgage. You’ll have up to 120 days to complete your projects.
» MORE: Learn the basics of VA loans

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How VA renovation loans work

In many cases, borrowers will get a mortgage to buy a fixer-upper and then get a second loan to pay for the actual fixing-up. VA loan borrowers have the option to get a VA renovation loan, combining these expenses into one loan with one payment.
When used for a purchase, the U.S. Department of Veterans Affairs will back a renovation loan based on the acquisition cost or as-completed value — whichever is less. This amount will be determined by an appraisal.
Loan installments will be paid out to your contractor, and you’ll have to provide written approval prior to each disbursement. You can choose your own builder or contractor, but they’ll have to register with the VA. Your lender might have additional specific requirements about who you can hire for your project.

Requirements for a VA renovation loan

You’ll need a Certificate of Eligibility (COE) before getting a VA renovation loan. This proves to the lender that you qualify for a VA-backed home loan.
The home will also have to pass a VA appraisal and inspection. While the house doesn’t necessarily have to meet the VA’s minimum property standards when you buy it, it must adhere to these guidelines by the time renovations are complete. These technical standards are outlined in the VA handbook, which includes must-haves such as drainage and electrical connections.
The VA doesn’t require a certain credit score to qualify for a VA renovation loan; however, lenders will set their own qualifications. You’ll have the best chances of qualifying with the most lenders by having a score of at least 620.

Pros and cons of a VA renovation loan

Pros
  • More options when home shopping. Unlike a typical VA loan, you’re not limited to homes that meet the VA’s minimum property requirements at purchase. By expanding your search to include fixer-uppers, you may have more opportunities to find a house that can fit your needs. 
  • Borrow based on the home’s future value. Your maximum loan amount will be determined by the expected value of the home after repairs are complete, not its current condition, which may allow you to finance more of the project.
Cons
  • This kind of loan can be difficult to find. Even lenders that specialize in VA loans may not offer VA renovation loans.
  • Not all projects are allowed. According to the VA handbook, any alterations or repairs “must be those ordinarily found on similar property of comparable value in the community.”

Where to get a VA renovation loan

VA renovation loans are not easy to find. Among lenders surveyed by NerdWallet in 2026, only eight offer VA renovation loans:

Consider a VA cash-out refinance to renovate your current home

If you want to improve your current home without moving, you could pay for your project with a VA cash-out refinance. This replaces your current home loan (which doesn’t need to be a VA loan) with a new, larger mortgage. You’d use the difference to pay for your renovations.
Unlike with a VA renovation loan, there are no stipulations on how to use the money, so you may have more flexibility in the kind of projects you can do.

Refinancing an existing VA loan?

If you’re refinancing from a current VA loan, you’ll have to meet the VA’s seasoning requirements. These require that the first payment on the cash-out refinance has to be at least 210 days after the first payment on your original VA loan. This timeline doesn’t apply if you’re refinancing from a non-VA loan.
You’ll get a new interest rate and term (or loan length) for your mortgage, which would be an advantage if the new interest rate is lower than your original rate. If rates are higher, you should compare a refi with other types of loans (such as a second mortgage) to find your most affordable option.
VA cash-out refinances are much more widely available compared to VA renovation loans. Among lenders surveyed by NerdWallet in 2026, 41 confirmed they offer VA cash-out refinances. This includes all of the lenders on our list of the best VA lenders:
» MORE: Compare VA refinance rates and fees

Other VA loan options for renovations

Depending on your needs, the VA may have an alternative program that can fund your project.

VA loans for energy efficiency (EEM)

You can finance the cost of energy efficiency improvements by adding an Energy Efficient Mortgage (EEM) to your VA purchase or refinance loan. Eligible improvements include things like thermal windows, insulation and solar heating or cooling systems. This loan is typically capped at $6,000.
Among lenders surveyed by NerdWallet in 2026, 13 confirmed that VA EEMs are available, including five from our list of the best VA lenders:

Disability housing grants

Projects that make the home more livable for a disabled resident may be financed with a Specially Adapted Housing Grant (SAH) or Special Home Adaptation Grant (SHA).
To qualify for a Specially Adapted Housing Grant, you must own your home and have a service-connected disability. The borrowing limit is $126,526 for 2026. Only 120 grants are available during the fiscal year.
Special Home Adaptation Grants have a smaller limit of $25,350 for 2026, but you don’t have to be the homeowner. If you’re a veteran or service member with a service-connected disability, this grant can be used to finance accessibility projects for a home owned by either you or a family member with whom you’re permanently living.
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