VA Loans for Boats and RVs

A VA loan is a great option for purchasing or refinancing a home, but what about boats and RVs? While VA loans are typically more flexible than traditional mortgage options, they still have restrictions on what properties qualify.

Why Boats and RVs Don’t Qualify for VA Financing

The VA wants to ensure that the property a Veteran is buying with a VA loan is structurally safe and secure, which means all homes financed through VA must meet the MPRs.

One requirement that boats and RVs fail to meet is that the estate must be classified as real property. This means the property must have a permanent foundation, which unfortunately disqualifies boats and RVs from being purchased with a VA loan.

Boats and RVs also fail to meet the VA’s minimum square footage requirement of 400 square feet for single-wide homes, making them an unauthorized property type for VA financing.

However, if you’re in the market for a boat or RV, there are other financing options available to you.

Using a VA Cash-Out Refinance for Boats or RVs

If your dreams of boat or RV ownership are strong, your options of using VA financing aren’t over completely. Homeowners who have equity in their home may be able to use a VA Cash-Out refinance loan to purchase a boat or RV.

Cash-out refinancing allows homeowners to tap into their home equity and use the proceeds for any purpose they choose, including purchasing a boat or RV. To clarify, there are no restrictions on how borrowers spend their cash after refinancing.

For example, if your home is worth $300,000 and you owe $200,000 on your mortgage, a VA Cash-Out refinance could allow you to borrow up to $100,000. That means you can use the money you borrowed to purchase a boat or RV, for home improvements or to consolidate debt.

Cash-Out Refinance Guidelines

If you’re interested in a cash-out refinance, you must meet both VA eligibility criteria and your lender’s financial requirements.

Here is what’s typically required:

• You must be eligible for a VA loan as a Veteran, active-duty service member or surviving spouse.
• The home you’re refinancing must meet occupancy requirements and be your primary residence.
• You’ll need enough home equity. Typically, at least 10% to 15%, depending on the lender.
• At least six on-time mortgage payments must be made on your current loan before applying.
• Meet additional lender financial requirements, including credit score minimums, income verification and acceptable debt-to-income ratios.

Since most VA loans require you to occupy the home as your primary residence, you may not be able to move into the houseboat or RV after cash-out refinancing.

Eligible Property Types for VA Loans

One of the great things about VA loans is that they can be used to purchase several different types of properties. While a boat or RV isn’t eligible for VA financing, there are many other property types that qualify.

Some of VA-eligible properties include:

• Single-family homes
• Multi-unit homes
• Manufactured and modular homes
• New construction
• Condos
• Barndominiums
• Tiny homes

The ultimate goal of the VA home loan is to help eligible Veterans purchase their primary residences. Therefore, the VA sets restrictions on what a VA loan can and cannot be used for. Make sure to check the specific requirements for each property type with your lender.

Final Thoughts

While it’s true that you cannot finance a boat or RV with a VA loan, that doesn’t mean there aren’t other ways to utilize your VA loan benefits to achieve that goal. A VA Cash-Out refinance loan is a great option for borrowers with enough equity in their home and looking to purchase a boat or RV.

Reach out to a Veterans United VA loan expert at 855-870-8845 or get started online today.