Why This VA Loan Could Change the Game
Veterans and active duty service members often face difficult housing decisions—especially when PCSing to locations like Camp Lejeune or Camp Pendleton. Many available homes are outdated or require serious repairs, making them off-limits to traditional VA loans.
That’s where the VA Rehab Loan steps in. With this tool, qualified buyers can finance both the purchase price and repairs of a home in a single loan—creating an opportunity to buy below market and instantly add equity.
Dan Chapman, a VA loan specialist and mortgage expert with The Chapman Group at CMG Home Loans, emphasizes how this strategy can help military families build wealth through smart real estate moves. According to Dan, “This is one of the most powerful tools in the VA loan arsenal, especially for house hacking and long-term investing.”
What Is a VA Rehab (Renovation) Loan?
The VA Renovation Loan, often called a VA Rehab Loan, allows eligible veterans and active-duty service members to buy or refinance a home and include the cost of repairs in one package. Think of it like the FHA 203(k), but exclusively for those with VA eligibility.
This is especially beneficial when purchasing homes that don’t meet the VA’s Minimum Property Requirements (MPRs), but have strong after-repair value potential. Instead of skipping over homes that need TLC, you get to see their future potential.
The Numbers — How It Actually Works
Let’s break it down:
- You find a $300,000 fixer-upper near Camp Lejeune.
- You need $30,000 in repairs (roof, HVAC, and paint).
- The appraiser provides both the as-is value and an after-renovation value.
- Your VA loan is structured as $330,000.
- The lender holds the $30K in escrow and pays licensed contractors after each phase.
- Repairs must be completed within 60 days of closing.
- A 10–15% contingency fund is included in case of surprises.
This structure means no out-of-pocket repairs, while still unlocking value from undervalued properties.
What Can You Fix With a VA Rehab Loan?
Allowed Repairs Include:
- Roof replacement
- Flooring, drywall, and interior paint
- HVAC, electrical, and plumbing
- Septic system repairs
- Termite remediation
- Bathroom/kitchen updates
Not Allowed:
- Luxury additions (e.g., saunas, pools, high-end expansions)
- Structural additions
- Detached garages or new constructions
Repairs must improve livability or meet MPRs—not just aesthetic preferences.
Why Most Lenders Don’t Offer This
The VA Rehab Loan involves a more complex process than the standard VA loan. That’s why many lenders don’t offer it. Here’s why:
- It requires a renovation department to manage escrow draws.
- The loan must stay open during the renovation period.
- Appraisals must factor in after-repair value, which adds underwriting complexity.
- Lenders need trusted networks of VA-approved contractors.
One example of a company that specializes in VA rehab loans and handles this process internally is CMG Home Loans, thanks to its renovation division and streamlined systems.
Using the Loan to Build Generational Wealth
This loan doesn’t just provide housing—it can help veterans build lasting wealth.
Scenario: House Hacking a Duplex
You purchase a duplex near Camp Lejeune for $300,000. One unit needs $25,000 in upgrades. With a VA Rehab Loan, you roll in renovation costs and live in one unit while renting out the other.
- Monthly VA mortgage = ~$2,200
- Rent from second unit = ~$1,500
- Your net housing cost = $700/month or less
- In a few years, you refinance or PCS—and now you own an income-producing asset
This strategy can be repeated across a 20-year military career where you purchase at each duty station, turning the previous home into a rental with forced appreciation due to the renovations you completed.
Each base becomes an opportunity to acquire real estate with 0% down, gain equity through smart renovations, and create long-term passive income.
The Homework You Need to Do Before You Start
The VA Rehab Loan process isn’t plug-and-play. It requires some legwork:
- Identify the Property:
Focus on homes in solid locations with strong resale potential. - Develop a Scope of Work:
Clearly define each renovation needed. The lender will review this with an appraiser to calculate after-repair value. - Lock in Licensed Contractors:
VA requires that only licensed and insured professionals perform the work. You’ll need itemized bids upfront. - Get Pre-Qualified:
Before making offers, work with a lender to understand your budget and get pre-approved. - Understand the Timeline:
Expect a slightly longer close and a 60-day window post-closing to complete work.
Your lender will walk you through this process. Most experienced VA rehab loan lenders will even help you:
- Review and vet contractor bids
- Create the draw schedule for repair payments
- Guide you on what’s eligible and what isn’t
The key is to start with a lender who specializes in this loan type.
Who Should Consider This Loan?
This loan is ideal for:
- Active duty service members PCSing to areas where older housing exists like Camp Lejeune
- Veterans ready to leave renting behind and start building equity
- Military families who want to stretch their BAH into an appreciating asset
- First-time investors looking to get started with VA eligibility and no money down
Dan’s #1 Tip Before Applying
Dan Chapman advises all veterans:
“Don’t walk into a big bank branch and ask about this loan—they might not even know it exists. Talk to a VA renovation loan specialist first. Get a soft credit pull, figure out your payment comfort zone, and start scouting fixer-uppers.”
He also adds,
“Stretch your budget on the property, not the car. You can live in a smart real estate deal—your car won’t pay you back.”
Conclusion: The Loan That Can Help You “Make It Happen”
The VA Renovation Loan isn’t for everyone—but for the military member with vision, it can be a powerful path to owning smarter, building equity faster, and creating generational wealth.
Tired of renting or seeing homes sit because of a few needed repairs? This might be your play. Whether you’re living in the home or turning it into your first rental, this VA loan gives you the power to transform potential into payoff.