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asked Sep 12 in FHA Loans by Darryl

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Hello Darryl, and thank you for your question. The VA home loan and the FHA 203(k) are two unrelated programs. The VA requires homes to be complete and ready for occupation before closing. However, you can add some energy-efficiency-related improvements to a VA purchase or refinance. These additions are called EEMs, or Energy-Efficient Mortgages. Here is an article about VA home loans and EEMs. https://themortgagereports.com/19330/va-eem-home-energy-efficiency-mortgage-gina-pogol

To do home rehabs not related to energy efficiency, you cannot use a VA mortgage but can use an FHA loan, which has a 3.5 percent equity or down payment requirement. However, that amount can be gifted, borrowed from an approved source, or come from an approved down payment assistance program. Here is a guide to down payment assistance that may help you. https://themortgagereports.com/33553/complete-guide-to-down-payment-assistance-in-the-usa

Finally, if you, like many veterans, are a first responder or teacher, you may be eligible for the Good Neighbor Next Door program, which allows you to purchase FHA homes with just $100 down and at a 50 percent discount. Here is an article about that program. https://themortgagereports.com/13751/hud-good-neighbor-next-door-program-sells-u-s-homes-for-50-off

Good luck with your mortgage and your home search, and thank you for writing.
answered Sep 13 by GinaPogol (45,150 points)
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