A VA loan is given to veterans who are in the market to buy a home. In addition, VA loans also allow people to build their own home, refinance a house, and even buy out a multi-unit property. However, as beneficial as a VA loan is, there are rules and regulations that must be followed.
Here are a few things individuals cannot do with a VA loan.
Purchase a Farm
VA loans may be used to purchase houses and properties, but they cannot help purchase a farm. A farm is a massive piece of land that someone can own, but a VA loan cannot be used to purchase that land. However, that doesn’t mean you can’t use a VA loan at all. It’s possible to use a VA loan to purchase a home that is already on the property.
Invest in a Co-Op
When people refer to the term “Co-op,” they’re referring to co-op buildings. Co-op apartments are a series of buildings that people don’t necessarily own. Instead, people who invest in co-op buildings become corporation shareholders of said building. Veterans cannot use their VA loans to invest in a co-op building.
Get a Business Loan
Veterans are also unable to use their VA loan to acquire a business loan. A business loan is a loan that is for business use only. In order to be qualified for a business loan, a person must show a reasonable amount of income and collateral. A VA loan does not pass for a type of income as it is only for housing purposes.
Buying a Home in a Foreign Area
Lastly, a VA loan is not able to acquire a house in a foreign area. It can only be used in its designated area, which is the United States and other places deemed US territory. It’s eligible to get a home in a place like Puerto Rico, however, it cannot secure a place outside of the country.
A VA loan is essentially the starting point for retired veterans. It allows them to get back to living like a civilian and not as a soldier, but it cannot be used for anything outside of housing. If you’re considering applying for a VA loan, research first and make sure you’re eligible to apply.