Barndominiums are a hybrid between a barn and a condominium, making it another home option using your VA loan.
Barndominiums have become an extremely popular home option over the last few years, and you may be wondering if you can finance one with a VA loan. They've been showcased regularly on DIY and real estate shows, which has helped to introduce these unique homes to a wider group of homeowners. In turn, barndominiums have become a top choice for many homeowners.
If you’re looking for a home with room to live, space to work and the option to customize to your needs, it may be worth considering a barndominium. Here’s what to know about this unique type of home.
What Is a Barndominium?
A barndominium — a combination of the words “barn” and “condominium” — is what it sounds like: a barn that has been converted into a home. These types of homes are created either by converting an existing barn into a living space or are built from the ground up to the owner’s specifications.
One of the main attractions of barndominiums is that their interior spaces are easily customized and versatile. There are typically two options for the exterior of these structures:
- A pole barndominium, which often uses wood post-frame construction
- A traditional barndominium, which often uses a metal and steel frame for support
In both cases, the exterior provides a solid structure and does not require the use of load-bearing walls on the interior. This means the construction process is less labor-intensive.
Can I Build or Buy a Barndominium With a VA loan?
Yes, generally, it’s possible to build or buy an existing barndominium with a VA loan. The barndominium must meet the minimum property and occupancy requirements set by the VA, along with other guidelines.
A VA loan requires that the property being purchased is being used as a primary residence. Therefore, if you are applying for a VA loan to build or buy a barndominium, you must intend to live in the home full time.
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Note: Veterans United does not offer financing for new construction
Barndominium Property Requirements
All barndominiums must be in line with the VA loan inspection requirements, which include the following:
- Electric, heating, and cooling systems must be working and in good condition
- Roofing must be adequate and built to last
- The size must be sufficient for basic living needs
- Water supply must be continuous and clean
- The home must be free of any lead-based paint, and any issues with wood-destroying insects, fungus, and dry rot
- The home must have safe and sanitary sewage disposal
- The home must be accessible from an all-weather public or private street
- Attics and crawl spaces must be accessible and properly vented
If the barndominium can meet these minimum VA standards, you are potentially eligible to build or buy it with a VA loan.
The VA appraisal is a key part of the process. One of the challenges with this type of housing is that it’s uncommon. That can make it tough for appraisers to find good recent comparable home sales.
Make sure your real estate agent and lender know right away if you’re interested in this type of home.
Using Your VA Loan Benefit to Build a Barndominium
Building a barndominium from the ground up with a VA loan can be tricky. It’s possible to do, but because there are risks associated with new construction, many VA lenders, including Veterans United, opt not to offer construction loans.
In some cases, it might be easier to obtain a construction loan from a builder or bank instead. Construction loans are short-term, higher-interest loans that give you the funds required to build your home. These loans will typically be issued for a one-year period and are used to finance only the construction of a home.
If you opt to finance the construction of your barndominium with a conventional construction loan, you may be able to refinance the loan with a VA Cash-Out refinance after the home has been built. Refinance guidelines can vary by lender.
Are Barndominiums Cheaper Than Regular Homes?
Barndominiums are typically cheaper than traditional brick-and-mortar homes because the construction process is much simpler. That said, the type of exterior construction materials will have an impact on the total price.
In general, steel barndominiums are more expensive to build than pole barndominiums. But, in both cases, there are lots of other factors, like the cost of the interior fixtures, the materials and the size of the structure that can add to the cost of the home.
Final Thoughts
Barndominiums can be a great option for buying or building an affordable, versatile, and custom home. These structures make it easy to combine work and living into one open-concept space, and the purchase can typically be funded by a VA loan.
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