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Buying an Older Home with a VA Loan

Purchasing an older home can be an exciting endeavor, especially for Veterans seeking a VA loan. But does the age of a home affect a Veteran’s loan approval?

If you’re interested in buying an older home using a VA loan, it’s important to understand what the VA requires and expects from the home. Let’s explore how a VA loan looks with an older property.

Does Home Age Matter When Using a VA Loan?

No, the VA does not specifically reference what age a home can be for a VA loan. However, other factors must be considered when buying an older home. The home must meet the VA’s minimum property requirements and the state and/or local building codes. The VA also considers whether the property has what's known as "remaining economic life."

What is the "Remaining Economic Life" of the Property?

The remaining economic life of the property must be as long as the term length of the loan. The length of the economic life cannot be arbitrarily determined to ensure Veterans are able to live in the home of their choice in any area.

A VA-assigned fee appraiser is responsible for determining what the remaining economic life of the property is as part of the required appraisal process. A few things the appraiser must consider when determining the remaining economic life include:

  • The relationship between the property and the economic stability of the block, neighborhood and community
  • Comparisons with homes in the same or similar areas
  • The need for a home of the particular type being appraised
  • The architectural design, style and utility from a functional point of view
  • The workmanship and durability of the construction, its physical condition and probable cost of maintenance and/or repair
  • The extent to which other homes in the area are kept in repair

While no mention of the actual age of a home is mentioned in VA guidelines, it may be a factor in the home’s remaining economic life. That said, age is not the only factor nor the defining factor.

Borrowers may find historic homes that, while very old, are well-maintained and an important part of the communities they are in — the remaining economic life for such properties would be different for any home that had not been properly maintained.

Will an Older Home be Approved for a VA Loan?

Some older homes, if well-maintained, can be approved for a VA loan. As long as the property meets all of the VA’s minimum property requirements, the loan can be used for that property. Just like a new house that has property issues, an older home can be considered unfit for someone to buy or live in. The age isn’t always the issue, it’s the quality of the house that can be the problem.

Negotiating VA Loans on Older Homes

Although home inspections aren’t required for VA loans, they can help buyers find any issues or repairs early on. If any issues with the house come up in the inspection, buyers can start negotiating for these to be fixed before the appraisal. This depends on the situation and if the buyer and seller are on the same page.

Reach out to a top VA lender today to see if you and your home qualify!