Can I Get Money Back At Closing For Home Repairs With A VA Loan?

In the majority of cases, VA loans do not allow for money back at closing to cover home repairs.

If the the appraisal calls for repairs to be made, either the seller or buyer will have to pay for these repairs.  The one exception to this rule is if you use an energy-efficient VA mortgage for home improvements.

Some examples of VA approved energy-efficient home improvement mortgage include but are not limited to:

  • Solar heating/cooling.
  • Improved weather stripping.
  • Upgrades for furnaces.
  • New thermostats.
  • Added home insulation.
  • New energy-efficient doors and windows.

The VA does limit the amount of money you can borrow for energy-efficient home improvements to a maximum of $6,000 above your VA loan amount.

There are also requirements you must follow for providing documentation to have your improvements included in your VA loan:

For improvements up to $3,000:

  • A copy of a quote from a contractor listing the improvements and the associated expenses. This quote has to name the model numbers and item names set for installation and the quote must contain signatures and dates signed for the contractor and the veteran borrower.
  • For each of the items to be installed, you must provide documentation from the manufacturer that details the cost, item names, and model numbers.

For improvements between $3,000-6,000:

  • A copy of a quote from a contractor listing the improvements and the associated expenses. This quote has to name the model numbers and item names set for installation and the quote must contain signatures and dates signed for the contractor and the veteran borrower.
  • For each of the items to be installed, you must provide documentation  from the manufacturer that details the cost, item names, and model numbers.
  • Either your utility company or someone else has to perform an energy assessment of your home. This assessment must detail your average monthly utility costs are for the previous 12 months.

By following this procedure you can take full advantage of your military benefits and receive money back at closing for money saving home improvements which will also reduce your negative impact on the planet.

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