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VA Home Improvement Loans: Guidelines & Renovation Loan Options for Veterans

If you’re a current or former member of the U.S. military, or you’re related to one, you might have heard of VA loans, mortgage loans guaranteed by the federal government through the U.S. Department of Veterans Affairs (VA).

VA loans are special home buying loans designed to help veterans and current servicemembers purchase real estate. Typically, VA mortgage interest rates are lower, and the loans come with low or no down payment requirements, and no requirement to purchase private mortgage insurance.

The VA also offers loans specifically for home improvement or renovation. In this guide, we’ll tell you everything you need to know about finding the right VA loan for home improvement.

In this guide:

What is a VA home improvement loan, and how does it work?

The VA does not administer loans itself. Instead, it partners with banks and other lenders to guarantee the loans. A VA home improvement loan (sometimes called a “VA renovation loan” or “VA rehab loan”) is designed for renovating, rather than merely purchasing, a home.

Typically, VA home improvement loans are part of a VA mortgage. They give borrowers the chance to purchase real estate in poor condition and repair it to the point that it is livable. You can also apply for a VA home improvement loan when refinancing your mortgage if your home needs renovation.

You should look for VA home improvement loans from any lender that offers VA loans. Our list of the best VA lenders would be a great place to start your search. You’ll have to get a certificate of eligibility from the VA, but you’re free to work with the private lender of your choice.

VA renovation loan guidelines

A VA home improvement loan comes with a few guidelines. You can’t use it to change just anything about your home. 

The list of approved projects includes:

  • Roof and flooring repairs.
  • Electrical repair or replacement.
  • HVAC repair or replacement.
  • Lead paint remediation.
  • Foundation repair.
  • Energy-efficiency improvements.

The key thing the VA requires is that alterations and repairs “must be those ordinarily found on similar properties of comparable value in the community.” 

You can’t use it as a loan for cosmetic landscaping, to build an infinity pool, or to add marble columns to your home, for example. But you can use it to bring your home’s features in line with your neighbors’.

VA rehab loan options

The VA home loan program offers several loans you can use to buy or remodel a home.

Purchase loans

VA purchase loans are exactly what they sound like. You can use one to buy a new home that will be your primary residence with little or no money down and low mortgage rates. If the home you’re purchasing needs renovation, you can fold renovation costs into the loan amount.

Cash-out refinance loans

Cash-out refinance loans let you take cash out of your home equity by replacing an existing VA loan. You can use that money for anything, including to pay off other debts or for home improvements.

Interest Rate Reduction Refinance Loans (IRRRL)

An interest rate reduction refinance loan is a way to reduce your mortgage interest rate. This can reduce your mortgage payment and save you money in the long run, but doesn’t offer cash out.

Native American Direct Loan Program (NADL)

Native American veterans can apply for a Native American Direct Loan to purchase, build, or renovate a home on Federal Trust Land. You can also use this program to refinance an existing VA loan for a lower interest rate.

Adapted Housing Grants

Veterans with a permanent and total service-connected disability can use this program to build an accessible home or modify a home for accessibility. You can even use this grant in conjunction with a VA home improvement loan for modifications that the grant won’t cover.

How to apply for a VA home improvement loan

The VA partners with private mortgage lenders to offer VA loans. Still, you’ll need to work with the VA to prove your eligibility and apply.

VA loan eligibility

Your first step once you decide to apply for a VA loan is to prove your eligibility as a veteran, service member, or surviving spouse. To be eligible, the relevant military service must meet one of the following requirements:

  • During World War II, the Korean War, or the Vietnam War: 
    • Have 90 days of active duty service.
    • Be discharged for a service-connected disability.
  • During the Gulf War: 
    • Have 24 months of continuous active duty.
    • Complete at least 90 days or the full term ordered to active duty if discharged, other than dishonorable discharge or for a service-connected disability.
    • Be discharged for a service-connected disability.
  • During peacetime:
    • Have at least 181 days of continuous active duty.
    • Be discharged for a service-connected disability.

Those who receive a dishonorable discharge are not eligible.

How to apply

If you’re eligible, you’ll need to apply for a Certificate of Eligibility (COE) through the VA or your VA lender. The forms and requirements for getting a COE vary with your current military status. You can apply for a COE online, through the mail, or directly with some lenders.

Once you have a COE, you can apply with a private VA lender.

Top VA renovation loan lenders    

Once you’ve decided to apply for a VA home improvement loan, you’ll have to choose a lender. Here are some top va loan lenders to consider:

Veterans United

Get a quote from the Nation’s #1 VA lender

  • See if you meet the requirements to use your hard-earned VA Loan benefits
  • Turn your military service into savings with a $0 Down VA Loan
  • Get a snapshot of what your monthly payments could be with a VA Loan

Veterans United focuses specifically on providing loans to veterans. Its experience with the VA loan process makes it one of the best lenders for veterans.

Loan info:

  • LendEDU rating: 5.00 / 5.00
  • BBB rating: A-
  • States available: 50
  • Origination fee: Up to 1%
  • Prepayment fee: $0    
  • Closing cost: 3% – 5%


Home Mortgage, Refinance, and Home Equity Loans

  • Fixed terms
  • Affordable monthly payments
  • Cash out up to 90% loan-to-value

LoanDepot is one of the largest VA and FHA lenders in the United States. It also offers conventional home loans. You can apply at more than 150 locations across the country or submit an application online.

Loan info:

  • LendEDU rating: 4.88 / 5.00
  • BBB rating: A-
  • States available: 50
  • Origination fee: 1% – 5%
  • Full review: loanDepot Mortgage Review

New American Funding

Your Mortgage, Your Terms.

  • Get pre-approved in as little as 48 hours
  • Complete the entire application process online
  • Choose from a wide variety of mortgage options

New American Funding is a family-owned lender that specializes in offering government-backed loans, including VA, FHA loans, and USDA loans. The lender excels at speedy approvals, letting you get to closing faster than usual.

Loan info:

  • LendEDU rating: 4.86 / 5.00
  • BBB rating: A+
  • States available: 48
  • Funding fee: 1.25%
  • Prepayment fee: $0

How we rated VA loans

We ranked and rated the best VA lenders based on the weighted average of 10 data points:

  • BBB Rating (10%)
  • Trustpilot Rating (5%)
  • States Available (5%)
  • Lender Fees (12.5%)
  • Application Fees (12.5%)
  • Online Application (5%)
  • Fixed Terms (15%)
  • 30 Year APR (10%)
  • Customer Support (20%)
  • Zillow Rating (5%)

Other home improvement loans for veterans

Being a veteran or servicemember doesn’t mean you need to use a VA loan—especially if you just want to make discretionary improvements to your current home. 

Conventional home improvement loans (typically personal loans) come with benefits, as well. You can do almost anything with a conventional home improvement loan, while VA loans are limited to specific uses.

If you want to use more conventional financing for home improvement, consider personal loans, home equity loans, or home equity lines of credit (HELOCs).

Personal loans for veterans

Personal loans are highly flexible loans that you can use for almost anything. They’re unsecured, so you don’t have to provide collateral, but their interest rates are likely to be higher than secured loans.

Most personal lenders are quick at making lending decisions, which can mean you’ll get cash fast.

Many lenders offer personal loans, so we put together a guide to the best personal loans for veterans to help you choose.

Home equity loans for veterans

Home equity loans let you turn some of your home’s equity into cash. They have lower interest rates than personal loans, but you’ll use your home as collateral. That means your house is at risk if you can’t make your monthly payments.

You can get a home equity loan from many lenders, but veterans might want to work with Navy Federal Credit Union.

HELOCs for veterans

A Home Equity Line of Credit (HELOC) is like turning your home equity into a credit card. Rather than taking out a lump sum of cash, you can take out only the amount you need and make multiple withdrawals up to the credit limit. 

HELOCs are great for home renovations, especially if you have multiple small projects to work on over several months or years.

Because you use home equity, HELOCs have lower interest rates than unsecured loans, at the cost of putting your home up as collateral.

Again, Navy Federal Credit Union is a great choice for veterans, but many banks offer strong HELOCs worth considering as well.