Not all Veterans want to live in the city or suburbs. Often buyers desire to live away from the busyness of the city and live out in the country. So finding a home with some land attached has a lot of appeal. Imagine buying a house where you can hunt, ride a four wheeler, or grow a garden. Therefore owning a home where neighbors aren’t right on top of you is appealing to many! Well, a lot of Veterans run into an issue with lenders stating a VA home loan acreage limit. Properties with excess land may be difficult to finance for several reasons, but it is possible with VA. Let’s discuss.
Myth – VA Loans Have a 5 Acre Max
To understand the solution, let’s first discuss the problems. Primarily properties with more than a few acres can be difficult to finance. Actually, this is the case with most loans. One hurdle includes lenders having limits on the number of acres allowed with the home. For instance, lenders may set the limit at 5 acres. But even lenders which allow additional acreage, there could be another problem. The appraisal!
VA Appraisal Excess Acreage
In order to finance a home with excess acreage, there must be sales with similar acreage size. So, a home being purchased with 20 acres should not be compared solely with sold homes that have 1 acre or less. These properties are not similar and more than likely would cause an appraisal review issue. On appraisals, this would be called a “line item adjustment”. Basically, it makes the home unique. Typically, lenders do not like to lend on unique properties. Therefore, sales with excess acreage is key.
Similar Comparable Sales is Key to VA Home Loan Acreage Limit
So, it is best to research the market up-front with the realtor plus discuss with your experienced VA lender. Determine if there are recent sales of homes with similar acres. Although, the sales do not have to match exactly. But if there are similar sales, then that is where VA farm residence loans could finance that dream property. So contrary to belief, VA will lend on properties with more than 5 acres. Technically, there’s not a VA home loan acreage limit. Check out a success story below!
VA Loan Approved With Over 5 Acres of Land
We recently received an appraisal on a property that included over 19 acres and a modular home. Initially, the buyer had issues finding a VA lender willing to finance this property. After calling around, the buyer was referred to our team. So, we discussed the property with the real estate agent. It was very important to ensure there should be recent sales of properties with similar acreage. The realtor assured us there were supporting sales and the buyer wanted to proceed with an appraisal. In the end, the VA appraisal supported the value, had similar comparable sales, and we approved the loan.
VA Farm Residence Lending Nationwide
Across the U.S., there are so many places with excess acreage. It may be a home with 10, 20, 50, or 100 acres. There are plenty of large acre plots with homes in our area, so we are used to this. Horse farms are very popular too. The possibilities are endless! As you will see, we are lending in 46 out of 50 states nationwide, so reach out to us.
VA Guideline for Farm Residences – VA Home Loan Acreage Limit
So, can you buy a home with a lot of land? Actually, VA loan guidelines say “Yes”. Specifically, chapter 11 of the VA handbook (what VA lenders use as reference) explains how farm residences are treated. Although, you will see that VA allows buying a farm residence, still many lenders shy away from this guideline. But don’t fault lenders as homes like this are fairly unique. Thus, the issue. Fortunately, we do follow the VA guidelines for stick built homes and excess acreage.
VA Loans Do Not Have an Acreage Limit
First of all, VA loans are for residential purposes and not for business loans. But, VA farm loans allow Veterans to use their VA eligibility to purchase a farm on which there is a farm residence. In other words, it must be a primary residence. Most importantly, VA does not set a limit on the number of acres which the property may have.
VA Farm Residences Appraisal Requirements
A VA appraisal should not be a problem if there is a sufficient amount of similar properties sold in the area. Additionally, VA land guidelines state farm characteristics such as barns, sheds, corrals, stables, and pastures are acceptable for residential use. Yet, the VA appraisal may not include livestock, crops, farm equipment, or supplies in the valuation.
VA Appraised Value of Barns, Sheds, Corrals, Stables, & Pastures
Any of these farming features’ value must be solely based on residential purposes. For instance, stables may be expected to bring in a certain income or may cost a lot to build. But, a VA appraisal may not take farming business valuation into consideration. Rather, the appraiser would consider the fair market value for residential purposes only. A building would probably be counted as storage or garage rather than a business purpose.
Homes with Land Helps PTSD Victims
Years ago a Veteran looking at a home with lots of land explained something I haven’t forgotten. He spoke of the issues he experienced in the military that have lasting ramifications. So, he wanted a home with acreage so he could be away from city life, noise, and lots of people. Flat out, he desired peace and quiet which eased his PTSD symptoms. I have no comprehension of how much the military goes through, but certainly sympathize with and respect it. Luckily, VA loans help those dealing with PTSD have a less stressful life by financing homes with excess acreage.
Contact Us for VA Farm Residence or VA Loans for Excess Acreage
Are you running into an issue with lenders stating a VA home loan acreage limit? Maybe you’re a lender looking to help a Veteran by referring them? Call us! Also check out our other informative articles about obtaining a VA home loan. Our goal is to provide as much education as possible and make your home ownership dreams come true!
Country Homes Near Me
So country living sounds appealing to you? There are lots of ways to find the right piece of land. First, find a local Realtor experienced in properties with land. Relocating? Have your VA paperwork together.