Below is the site for USDA.
This is not a new program, but very few lenders know how to structure and process them, even though it is very similar to the FHA 203k program.
If any of you are still interested, please contact me at Tiffany.Bell@imortgage.com. I can only assist Florida homeowners, but we have offices throughout the SE, SW and Pacific NW.
I have been a Realtor for over 20 years in the Boise Idaho area and have never had to deal with a major remodel up front on a VA sale (until today). I "Google'd" the question and this was the #1 listing. Since I do a lot on Trulia, I figured I would weigh in.
Did you ever find a solution?
There is not a renovation loan or program that can be used with a VA loan. VA guarantees a loan much like FHA does (without the 203k renovation product), in that the home has to meet minimum property standards to be insurable.
There are changes pending in regard to FHA down payment requirements and mortgage insurance increases, but there are also benefits to a 203k loan such as the ability to do a Streamline 203k and also include monthly mortgage payments, if needed, during the improvement period so that you are not paying a mortgage and rent at the same time.
VA doesn't have a re-hab loan available for purchases. Bob Lowery is absolutely correct with his answers posted here on both accounts.
Should you decide to use the FHA203K loan for the renovations we do originate those loans and can usually close them within a 30-45 day time frame. You can read our booklet on a link at our web site listed below.
VA loans are great to use having no downpayment or mortgage insurance so you may want to reconsider your selection of home in order to take advantage of it benefits.
Remember the new deadline to use the first time buyer federal tax credit, if eligible, is ratified contract by 4/30/10 and close by 6/3010. Get up to $8000!! If you're a current homeowner, there is a tax credit for purchasing as well if you qualify for up $6500. You can read more about them at http://www.federalhousingtaxcredit.com/
Good luck and happy house hunting!
Also, when you click on the company's website on the blog you reposted, the website is no longer in existence. This blog you reposted was posted in January, 2009 and that company does not seem to be in existence any longer.