Are VA Loans Available for Boats and RVs?

VA loans are government-backed mortgages available to eligible veterans and service members, designed to help them buy a primary residence with favorable terms.

However, you can’t use a VA loan to buy a boat or RV, even if you plan to live in it, because the program is limited to real property with a permanent foundation. Since boats and RVs don’t meet this requirement, they don’t qualify for VA loan financing, according to the VA’s lender handbook.

That said, some veterans use VA refinance options, like a cash-out refinance, as an indirect way to help fund a boat or RV purchase.

VA Loan Cash-Out Refinance

While VA lenders won’t provide direct VA loan financing to purchase a boat or RV, they may allow eligible homeowners to use the VA’s cash-out refinance option on an existing home.

The VA’s cash-out refinance option allows you to refinance your existing home loan into a larger one, converting your home’s equity into cash.

While every VA-approved lender offers different terms, you may be able to borrow up to 100% of your home’s current value when you refinance. You can use this cash to purchase a boat or RV while keeping your mortgage as a VA loan.

Remember that your interest rate and other loan terms will change during this process.

Using a VA Cash-Out Refinance to Buy a Boat or RV

If you’re a veteran or military homeowner with equity in your home, a VA cash-out refinance can be an indirect way to finance a boat or RV purchase.

The VA doesn’t restrict how you use your cash-out funds, so you can put that money toward a boat or RV if you choose. You also don’t have to borrow your full available equity.

Here’s an example:

• Current mortgage balance: $200,000
• Home value: $300,000
• Available equity: $100,000

If the boat you want costs $50,000, you could:

• Refinance into a new loan of $250,000
• Pay off your existing $200,000 mortgage
• Take $50,000 in cash to purchase the boat

This allows you to borrow only what you need instead of using all your available equity.

VA Cash-Out Refinance Eligibility Requirements

To qualify for a VA cash-out refinance loan, veterans must meet all of the following requirements:

• Qualify for a VA home loan, as demonstrated by your Certificate of Eligibility (COE)
• Meet VA and lender requirements for income, credit score, and debt-to-income ratio
• Live in the home you’re refinancing as a primary residence

The VA’s occupancy requirement might pose an obstacle to this strategy if you are hoping to take up residence in your boat or RV immediately. If you plan to use your cash-out refinance to purchase a boat or RV as a full-time residence, you’ll still need to meet the VA’s occupancy requirement for the home you’re refinancing, which typically means certifying that you intend to occupy it as your primary residence.

Should I Use a VA Cash-Out Refinance to Buy a Boat or RV?

Just because a borrower can pursue this cash-out strategy doesn’t mean it’s the best choice. Before using VA cash-out refinance proceeds to purchase a boat or RV, veterans and service members should think about these additional considerations:

• Increased monthly payments: When you refinance into a larger loan, you’ll have larger loan payments. Assuming 3.5% interest and a 30-year loan, the monthly principal and interest payments for a $300,000 loan would be roughly $450 more per month than a $200,000 loan.
• Increased total interest payments: Most borrowers want to minimize their mortgage interest payments. Borrowers will pay roughly $57,000 more in interest over the life of a $300,000 loan than with a $200,000 mortgage.
• Depreciating assets: In most situations, homes are appreciating assets, meaning they become more valuable over time. This characteristic justifies mortgage loans for real property. Conversely, RVs and boats are depreciating assets, meaning they become less valuable over time. Borrowing money to buy something that loses value may not provide long-term benefits.

Final Thoughts

You cannot use a VA loan to purchase a boat or RV. However, a VA cash-out refinance can help you access home equity to fund the purchase indirectly. Just make sure you balance costs associated with a larger loan against the benefits of owning a boat or RV.

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