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.
Does age of home matter when using a VA loan?
No, the VA does not specifically reference what age a home can be. There are other factors, however, that 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 includes:
- 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 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 or 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.