Build Your Dream Home with a VA Construction Loan
Connect with a VA Loan Expert
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Build Your Dream Home with a VA Construction Loan
Connect with a VA Loan Expert
By clicking the 'Learn More' button above, I authorize Arbor Home Loans to contact me using an automated dialing system, even if the telephone number is a cellular phone or other service for which the party is charged. I understand that I am not required to provide this consent in order to obtain goods or services from Arbor Home Loans. I agree to receive disclosures and communications in electronic form and I confirm that I have a working computer system and an internet website browser to view this webpage and this Loan inquiry form. I agree that Arbor Home Loans may contact me by mail, telephone (mobile devices including SMS and MMS) or email in connection with my request even if my telephone number or email address appears on a Arbor Home Loans internal Do Not Call / Do Not Email List, a State or National Do Not Call Registry, a Do Not E-Mail list, or any other Do Not Contact List.
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Va Construction Loan
Can You Use a VA Loan to Build a Home?
Yes, you can use a VA loan to build a home! While most people associate VA loans with purchasing or refinancing homes, the VA also offers options for those who want to build their dream home from the ground up. This is done through a VA construction loan, which allows eligible veterans, active-duty service members, and qualifying spouses to finance the construction of a new home with the same benefits of a VA mortgage—like no down payment and competitive interest rates.
What is a VA Construction Loan?
A VA construction loan is a loan that helps eligible veterans finance the construction of a new home, including the cost of land (if needed) and the building process itself. The VA construction loan provides a great alternative to traditional construction loans, which often require a large down payment. With a VA construction loan, you can enjoy favorable terms, including the possibility of no down payment and no private mortgage insurance (PMI).
How to Build a Home with a VA Construction Loan
The process of building a home with a VA construction loan typically follows these steps:
1. Find a Lender: While not all lenders offer VA construction loans, we do! As a VA-approved lender with an expert construction team, you can trust you’re in good hands.
2. Get Pre-Approved: We will pre-approve you for the loan based on your credit score, income, and other financial factors.
3. Choose a Builder: You’ll need to work with a VA-approved builder to construct your home. The builder must be registered with the VA to ensure they meet the necessary standards. If you need some references, please ask us!
4. Submit Plans: You and your builder will need to submit plans and specifications for the home to us for approval.
5. Close on the Loan: Once everything is approved, you’ll close on the construction loan and the building process can begin. Funds will be disbursed in stages as construction milestones are completed.
6. Convert to a Permanent Loan: After construction is finished, the loan typically converts into a VA-backed mortgage, which is a permanent loan with standard repayment terms.
Take the next step today!
Explore which VA loan is right for you and start your journey toward homeownership or refinancing. Reach out to learn more about your options and get expert guidance through the process.
What Types of VA Construction Loans Are There?
There are two main types of VA construction loans. Most borrowers prefer the one-time close construction loan because it’s easier and involves fewer closing costs, but your choice depends on your specific needs and what your lender offers.
One-Time Close Construction Loan
This loan covers both the construction phase and the permanent VA mortgage. It involves only one closing, simplifying the process and reducing closing costs. After the home is built, the loan automatically converts into a permanent VA mortgage.
Two-Time Close Construction Loan
This involves two separate loans—one for the construction phase and one for the permanent mortgage. After the home is built, you’ll close on a second loan to pay off the construction loan and establish the long-term mortgage.
Are There Certain Requirements to Build a Home with a VA Loan?
Yes, there are specific VA Mortgage Requirements when building a home with a VA construction loan, including:
1. VA Loan Eligibility: You must be eligible for the VA loan program, meaning you have served the required amount of time in the military or are a qualifying spouse.
2. VA-Approved Builder: The builder you hire must be approved by the VA to ensure the construction meets the required standards.
3. Approved Plans and Specifications: The home plans must be submitted to and approved by the lender to ensure they comply with VA guidelines.
4. Occupancy Requirement: The home must be intended as your primary residence once completed.
Are There VA Construction Loan Limits?
Yes, VA construction loans are subject to loan limits, just like standard VA loans. These limits vary by county and are based on the local housing market. However, if you have full VA loan entitlement, there are no loan limits, meaning you can borrow as much as a lender will approve, as long as you meet the credit and income requirements.
Learning Center
What is the VA Funding Fee?
The VA funding fee is a one-time cost paid by veterans, active-duty service members, and eligible surviving spouses when taking out a VA loan. The fee applies whether you're purchasing, building, or refinancing a home, and is paid directly to the Department of Veterans Affairs.
What is a VA Assumable Loan?
A VA assumable loan offers the unique advantage of allowing a new buyer to take over the seller's existing mortgage, potentially securing a lower interest rate and better terms.
What are the VA Mortgage Requirements?
If you’re considering a VA loan, you’re likely wondering what it takes to get approved. VA loans are designed to help veterans, active-duty service members, and their families achieve homeownership with favorable terms.