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0% Down Payment
Qualified borrowers can finance 100% of construction costs and the home’s land with no down payment required.
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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 allows eligible veterans, active-duty service members, and qualifying surviving spouses to finance the construction of a new home and the permanent VA mortgage with a single loan and one closing.
Unlike traditional construction loans that require two separate closings, this VA-backed option combines the land purchase (or land payoff), construction costs, and long-term mortgage into one streamlined process. The loan converts automatically to a permanent VA mortgage once construction is complete, with no second closing required.
Key advantages of a VA One-Time Close Construction Loan include:
This program is designed for veterans who want to build a custom home while minimizing closing costs, interest-rate risk, and complexity.
Qualified borrowers can finance 100% of construction costs and the home’s land with no down payment required.
Borrowers close once at the beginning of the process. There is no re-qualification and no second round of closing costs after construction is complete.
Interest rates are locked in before construction begins, protecting borrowers from market fluctuations during the build.
VA loans do not require PMI, which can save borrowers hundreds of dollars per month compared to conventional loans.
VA loans offer more flexible credit standards than many other loan programs. While requirements vary by lender, a 620 FICO score is often sufficient to qualify. Borrowers exploring alternatives may also consider an FHA loan .
If you already own a lot, existing equity can be rolled into the loan. For borrowers without land, the VA One-Time Close loan allows both land purchase and construction to be financed together.
The VA One-Time Close Construction Loan follows a structured process designed to protect both the veteran and the lender while keeping the transaction as simple and efficient as possible.
Here’s how the process typically works:
The borrower completes a VA loan pre-approval, including a review of income, credit, and Certificate of Eligibility (COE). This step helps determine eligibility and estimated borrowing power before moving forward. Obtain your COE.
The selected builder must be approved to construct VA-financed homes and meet all VA construction guidelines. Working with VA-approved builders and experienced VA construction loan lenders helps ensure the project stays compliant and on schedule.
The construction loan and permanent VA mortgage close at the same time, before construction begins. This is why it’s called a one-time close construction loan, eliminating the need for multiple closings.
Funds are disbursed to the builder in stages as construction progresses, based on approved draw schedules. This process protects both the borrower and lender while keeping the project on track.
Once construction is complete and the VA final inspection is approved, the loan automatically converts to a permanent VA loan with no second closing or refinancing required. Learn more about VA loans.
To qualify for a VA One-Time Close Construction Loan, borrowers must meet standard VA loan eligibility guidelines and additional construction-specific requirements.
General eligibility requirements include:
Veterans may use land they already own, purchase land as part of the loan, or build on newly acquired property, provided the land and construction plans meet VA requirements.
Because VA construction loans involve both lending and building approvals, working with a lender experienced in VA One-Time Close construction financing is critical.
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.
Understanding the difference between one-time and two-time close construction loans can help veterans choose the right financing option.
| Feature | VA One-Time Close | Two-Time Close |
|---|---|---|
| Number of Closings | One | Two |
| Interest Rate Risk | Locked upfront | Subject to change |
| Closing Costs | Paid once | Paid twice |
| Loan Complexity | Simpler | More complex |
| VA Benefits | Fully applied | Often limited |
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:
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.
Security America Mortgage provides VA One-Time Close Construction Loans for eligible veterans across multiple states. Each state has unique building requirements, VA considerations, and local approval standards.
We currently serve veterans in the following states:
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.
Yes. Veterans may use land they already own or purchase land as part of the loan, provided the land meets VA requirements.
In most cases, borrowers do not make full mortgage payments during construction. Interest-only payments may apply depending on the loan structure.
They require additional documentation compared to standard VA loans, but many veterans qualify with proper planning and guidance.
Yes. VA One-Time Close Construction Loans are commonly used for custom-built homes, subject to VA and lender approval.
VA loan limits depend on entitlement and county guidelines. Many veterans can build with no down payment.
The loan budget must include contingency reserves. Cost overruns beyond approved limits may require borrower contribution or loan modification approval.
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!
