Tiny Homes are all the craze. The tiny home sensation is sweeping the country and dominating airtime on popular home design channels such as HGTV and the DIY Network. For most, the draw to buying a tiny home is the ability to pay for it entirely in cash. But what happens when you need to finance your tiny home?
Tiny homes tend to be less than 500 square feet and are often mobile, giving owners the freedom to pick up and move at any time.
While you can technically use a VA construction loan to build a tiny home, there are many stipulations. For starters, you must own the land upon which it is built and, in most cases, the home cannot be mobile. But don’t stress yet, you can also use a VA construction loan to purchase land.
As long as the tiny home is not a second home or investment property, is within the United States and is not used for business purposes, its construction can be financed with a VA construction loan. However, it’s important to note that the major appeal of tiny homes is the low cost, and many lenders won’t lend money below a specific amount — $50,000 for example.
Also, most VA lenders will only approval standard stick-built homes, not prefabricated or modular homes.
Benefits of building a tiny house with a VA construction loan
If your tiny house does indeed qualify for VA construction financing, there are several benefits to using the program. Here are a few:
- Competitive interest rates
- No down payment
- No mortgage insurance
The purpose of VA home loans is to level the homebuying playing field for veterans and active-duty military members. Property financed through the VA must meet the VA’s minimum property requirements. These requirements are designed to protect homeowners and ensure homes are being built to local and federal building codes.
Now that you know that it is possible to build a tiny home with a VA construction loan, call us today to see if you or your home qualify for VA financing. When you’re ready to shop for financing to build your tiny home, our team of professional VA lenders is here to answer any questions you may have.