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For countless veterans, active-duty members and their families, starting from the ground up to build a home of their own feels just out of reach. But, with a VA One-Time Close Construction Loan, that scenario can become a reality without a down payment, without the need for a second closing, and without the hassle of 2 loan applications.
Even if you are starting with empty land, or you plan to build a home from scratch, this construction-to-permanent loan makes it easy for veterans to get the financing they need. Here’s what you need to know to make the most of your VA loan benefits.
A VA One-Time Close Construction Loan, also known as a VA OTC loan, is a unique mortgage program that makes it easy to build a new home with a VA loan for those who qualify.
Unlike other single close construction loans / VA construction loans which require 2 loans, the single close loan requires only one, which means no costs for a second closing. It’s insured by the U.S. Department of Veterans Affairs and made available through VA-approved private lenders.
This loan is available to:
Borrowers who qualify can finance 100% of construction and the home’s land with no down payment.
Borrowers go to closing once, at the beginning of the process. No pre-qualifying or another whack of closing costs after construction.
3. Competitive Rates of Interest
Interest rates are locked in before construction starts, guarding against fluctuations in the market while the build takes place.
4. No Private Mortgage Insurance (PMI)
VA loans don’t include a this payment, and other loans typically require this to save about a few hundred dollars each month.
5. Flexible Credit Guidelines
Seasoned Loan Officers Whether you request a federal FHA or loan for general purposes, Built For Loans will help you can secure the loan.
The minimum credit scores for an FHA loan depend on the type of loan the borrower needs and the lender who is offering the loan, but the agency says a 620 FICO score is generally enough to obtain financing.
6. Fully Covers Lot Purchase & Construction
Already own a lot? The equity can also be rolled into the loan. If you do not have one, you won’t be able to include the purchase of a land with your VA OTC loan.
The VA OTC loan combines the funds for building the home, purchasing the land, and converting into a standard mortgage, simplifying the overall process. The loan is approved by a lender on the basis of plans for construction, and the value of the finished home. After you close, funds are released to your builder in stages (draws) as your home progresses.
Payments on the loan are not required during the construction phase, which takes pressure off your cash flow during the build. Once construction is finished, you start making mortgage payments on what’s termed a fixed-rate mortgage.
To be eligible for a VA One-Time Close Construction Loan, you must:
VA construction loans can be used to erect:
Note: Condos and multi-family residences may require further approval and may not be listed for OTC loans.
This paper shows that you are eligible for a VA loan. You can apply via the VA’s portal, through your lender or by providing a Statement of Service if you are active duty.
Locate a VA-approved lender with OTC construction loans available. This is where they’ll look over your credit, income, COE, and financial documentation.
You should also have to go with a VA-approved builder. If your chosen builder is not registered, your lender or loan officer can help them get certified.
Submit your plans and building specs for lender and VA review. That includes estimates of value and costs.
After approval, you’ll attend one closing, pay any associated closing costs or fees (VA funding fee may be financed) and you can begin construction.
Payments are made to your builder while your new home is being built. Inspections make sure the work matches the plan.
After the home is finished, the house is appraised again by a VA-approved appraiser to ensure it meets VA’s standards.
Your loan simply converts to a standard mortgage. You start repaying the loan according to terms of the initial fixed rate.
Feature | VA OTC Loan | FHA OTC Loan | Conventional OTC Loan |
Down Payment | 0% | 3.5% | 5–20% |
PMI Required | No | Yes | Yes |
Credit Score | 620+ | 580+ | 680+ |
Loan Use | Primary Residence | Primary Residence | Primary or Investment |
VA Approval Needed | Yes | No | No |
Why VA Wins: For qualified veterans, the VA OTC loan offers the lowest upfront cost, no PMI, and more lenient credit and income standards than any other option.
Ans: Yes. Equity in land can be rolled into the VA OTC loan.
Ans: Only VA-registered builders are allowed. Have your lender verify or register your builder.
Ans: No Payments start only after the house is completed.
Ans: Yes. You may be eligible for VA Streamline Refinance (IRRRL) no prequalify for lower interest rates in the future.
We at Security America Mortgage focus on VA One-Time Close Construction Loans and this is one of the many standard fitting loans and benefits we bring to market for veterans:
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With zero stress, and all the help. From applying for a COE to selecting a VA-accepted builder, we have you covered at every stop.
Ready to start your journey? Give us a call at +1 (855) 468-2669 or visit our site to apply now!
This is where the VA One-Time Close construction loan can really shine. One of the most attractive programs for military families is this zero down payment, single closing, and government backed mortgage that is also backed by the Department of Veterans Affairs.
Don’t wait if you’re eligible and have been dreaming of a custom home. Start building the future you want with a VA loan Fri Dec 14, 2025 Take the first step to fighting back against unexpected bills and investments now by signing up for a program that was made to thank you for your service.
The interest rates on VA One-Time Close Construction Loans are highly competitive compared to traditional construction loans. In addition to this, you can avoid paying private mortgage insurance with a VA One-Time Close Construction Loan.
The process of obtaining a VA One-Time Close Construction Loan is pretty tricky. Rather than take on the process by yourself, you should enlist the help of a VA loan lender to help you through the application process. At Security America, our team of experts is willing to guide you through every step of the application process.
Mortgage payments on a VA One-Time Close Construction Loan have more competitive interest rates. You are not required to make repayments on your VA One-Time Close Construction Loan until the construction process is complete. Once the construction phase is complete, you do not have to re-qualify for a permanent loan.
A statement of service is a letter from your commanding officer detailing the status of your service and how long you have served. The statement of service is required to prove your eligibility for a VA loan and receive your certificate of eligibility.
With a VA One-Time Close Construction Loan, you can build a home for yourself and your family. VA One-Time Close Construction Loans are designed to help supply housing to veterans and combat the low housing supply. Unfortunately, VA one-time construction loans aren’t suitable for building million-dollar mansions.
All members of our team here at Security America Mortgage are experts when it comes to helping veterans obtain VA Home Loans. If you’re ready to get started complete the simple form above and one of our mortgage specialists will contact you shortly. We look forward to working with you!
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