The VA loan is a mortgage program designed to make it easier for service members and Veterans to access homeownership.
With a VA loan, Veterans, active duty service members and surviving spouses can purchase homes with little to no down payment, making it an attractive home financing option.
Another benefit to the VA loan is that it is often more flexible than a traditional mortgage, with the opportunity to purchase several different property types without the need for great credit.
With this much flexibility, you may be wondering whether you can use a VA loan to purchase an RV or boat, so let’s break down the requirements.
Unfortunately, you cannot use a VA loan to purchase a boat or RV. This is because RVs and boats fail to meet one of the basic guidelines for VA loans—they must be classified as real property and have a permanent foundation.
All properties purchased with a VA loan must meet the VA’s minimum property requirements.
Some of which include:
Some could argue that an RV is similar to a mobile home, especially if you intend to park it permanently and live in it. However, the VA rules go on to say that a manufactured home must have a permanent foundation that can withstand supporting and wind-overturning loads. Unless the home is classified as real property and has a permanent foundation, it cannot qualify for a VA loan.
While a VA home loan will not finance boats and RVs, Veteran homeowners could potentially tap into their home equity with a VA cash-out refinance and put the proceeds towards those items. This is a new loan with a new rate and terms.
Cash-out refinances let borrowers extract cash from the property’s equity. Those funds could then be used to purchase the boat or RV you have your eye on.
Of course, you still need to meet your lender’s criteria before you can obtain a cash-out refinance. Every VA-approved lender will have different rules and terms, so be sure to consult with them first.
If you're a Veteran interested in a VA cash-out refinance, some guidelines you might need to meet include:
The good news is that as long as you meet your lender’s requirements, there aren’t any restrictions on how you can spend your cash after a refinance.
While technically you can’t use a VA loan to purchase a boat or RV, it doesn’t mean that you cannot use VA financing at all. Homeowners with sufficient home equity could use a VA cash-out refinance to free up funds to make those purchases a reality.