Buy a home that needs work and finance the repairs in the same VA loan
The VA Alteration and Repair loan, commonly called the VA renovation loan, rolls the purchase price and the cost of eligible repairs into a single VA mortgage with no down payment. It is designed for homes that will not pass Minimum Property Requirements as-is, or that need modest updating, and the repair funds are held in escrow and released as the work is completed.
Pre-qualification review with a licensed loan originator
The VA Renovation (Alteration & Repair) loan lets eligible veterans finance a home purchase or refinance together with the cost of repairs and improvements in a single VA-guaranteed mortgage — still with $0 down and no monthly mortgage insurance.
If the home you want needs work, financing the repairs into your VA loan can beat saving up separately or taking out a second loan.
Reviewed by the licensed mortgage team at Simply Approved Mortgages · Last verified August 31, 2026 against the VA Lenders Handbook (M26-7)
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The VA Renovation Loan, formally the Alteration and Repair loan, rolls the purchase price of a home and the cost of eligible repairs into a single VA mortgage — still with $0 down and no monthly mortgage insurance. It's built for homes that won't pass a VA appraisal's Minimum Property Requirements (MPRs) as-is, or that simply need updating before move-in (VA Lenders Handbook M26-7, Ch. 12).
Repair funds are held in escrow after closing and released to a licensed, VA-registered contractor as work is completed and inspected, rather than handed over at closing. The appraiser values the property subject to the completed repairs, which is what allows the loan amount to reflect the home's after-repair condition rather than its as-is condition.
Fewer lenders offer this program than a standard VA purchase, so terms — maximum repair budget, contractor requirements, completion timelines — vary more by lender than they do on other VA products. Confirm your lender's specific rules before writing an offer on a home that needs work.
A renovation loan needs everything a standard VA purchase needs, plus a documented repair plan. Gather the contractor package early — it drives your closing timeline.
Veterans buying a home that needs repairs to meet MPRs, or who want to update a property without a separate second loan.
Often a home that would otherwise fail VA Minimum Property Requirements, or one priced below market because of deferred maintenance.
A VA-registered, licensed, insured contractor provides a detailed, line-item bid for the eligible repair scope.
The appraiser values the home based on its condition after the approved repairs are completed, not its current as-is condition.
The purchase closes with $0 down; the repair budget is held in an escrow account rather than paid to the seller.
Work generally must be completed within 120 days of closing, with funds released to the contractor as inspections confirm progress.
Once repairs are complete and inspected, any remaining escrow is closed out per your lender's procedure.
Illustrative only. Total loan amount is capped by the after-repair appraised value.
| Purchase price | $280,000 | |
|---|---|---|
| Eligible repair budget | $35,000 | |
| Total loan amount before fee | $315,000 | |
| Down payment | $0 | |
| Funding fee (2.15%, first use, $0 down) | $6,773 | Financed into the loan |
| Monthly mortgage insurance | $0 |
Edit the fields to see your down payment, financed one-time VA funding fee, and full monthly payment. VA loans allow $0 down and carry no monthly mortgage insurance.
Estimates only. Nothing here is an application, pre-qualification, pre-approval, rate quote, rate lock or commitment to lend. You can keep using this tool without giving us anything.
Estimates only — not a loan offer, rate lock, or commitment to lend. Taxes, insurance, and rates vary by county and credit profile.
The renovation loan preserves the $0-down VA benefit, so there's no down payment gap to fill with assistance funds. Budget instead for the contractor's timeline — delays in completing repairs are the most common reason closings slip on this program.
See all veteran benefitsYes. Like other VA purchase loans, it requires no down payment and charges no monthly mortgage insurance.
Repairs that bring the home into compliance with VA Minimum Property Requirements or add value to the existing structure. Luxury additions like pools are generally excluded.
It's held in an escrow account after closing and released to the contractor in stages as work is completed and inspected.
Most lenders require a licensed, insured, VA-registered contractor rather than allowing the veteran to self-perform the work.
Typically within 120 days of closing, though the exact window is set by the lender's program terms.
The escrow administration and inspection process require more operational overhead than a standard VA purchase, so program availability and specific terms vary more by lender.
We arrange residential mortgage loans only in Florida and Colorado. Each state guide runs the VA Renovation against that state's county limits, median prices, taxes and insurance, then breaks down to city-level guides.
A VA renovation loan finances a Florida home plus the cost of repairs in one VA loan, with no down payment. In Florida the most common use is roof replacement, wind-hardening and bringing an older home up to VA minimum property requirements so it can be insured and financed at all.
Open the Florida VA Renovation guideA VA renovation loan finances a Colorado home and its repairs in a single VA loan with no down payment. In Colorado the common uses are hail-damaged roofs, aging mechanical systems in older Front Range housing stock, and wildfire mitigation work that insurers now expect before binding coverage.
Open the Colorado VA Renovation guideStart a VA pre-qualification with a licensed loan originator. Licensed in Colorado and Florida.
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A VA loan can finance up to a 4-unit property with $0 down, as long as you live in one unit. Rent from the other units can even help you qualify.
Veterans receiving VA disability compensation pay $0 funding fee — often the single biggest savings in the entire loan. Here's how the exemption is proven and refunded.
Program rules and figures on this page are taken from the primary government sources below, not from third-party summaries.
Verified against VA Lenders Handbook M26-7, Change 6 — August 12, 2026. Simply Approved Mortgages is not affiliated with or endorsed by HUD, VA, or any government agency.
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