“The biggest factors are permitting, survey, site placement, and appraisal value.”
VA Construction Project Questions Answered by Jason Noble
Practical answers from Jason Noble, COO and VA Loan Specialist, Security America Mortgage, NMLS #352672, based on his VA construction lending experience. Answers lightly edited for clarity; first published October 23, 2026 and updated October 24, 2026. SAM’s process explanations below incorporate its contractor and project review requirements. These describe SAM’s program and experience; confirm the terms approved for your own loan.
What does SAM mean when a builder is approved?
Jason: The builder completes a contractor application and provides the requested documents. SAM verifies the information through a business credit check, reference calls, review of project history, insurance verification and the licensing required in the applicable state. Builder acceptance is one part of the review; the borrower, property, plans, contract, appraisal and particular project still need approval.
SAM coordinates two separate reviews: contractor acceptance and approval of the particular project. Project review includes complete plans and elevations, an executed construction contract, a matching itemized budget, appraisal, applicable permits and site reports, and documentation of prepaid expenses. Changes to the contract or budget may require renewed review. See our builder and contractor review guidance.
This is lender review, not a Department of Veterans Affairs endorsement. VA Circular 26-25-1 removed the VA Builder ID procedure for ordinary VA-guaranteed new and proposed construction. It did not remove lender review or applicable local requirements.
Does buying a completed new home require a VA construction loan?
Jason’s answer, paraphrased: If the home is already completed, you do not need a construction loan to buy it. A VA purchase loan finances the purchase of the completed home. A VA One-Time Close construction loan finances the build and permanent mortgage through one closing before construction.
SAM’s contract checklist: Before signing, confirm who finances construction, when your loan closes, whether the builder accepts SAM’s OTC contract and draw requirements, and which land and site costs are included. A builder offering VA purchase financing or build-on-your-land services does not by itself establish acceptance of SAM’s OTC structure.
Can land, site preparation, permits and impact fees be included in a VA OTC loan?
Jason confirms: Land, site preparation, permit and impact-fee costs can be included in SAM’s VA One-Time Close financing. Check the builder’s budget or completed project approval form to see what is included.
SAM’s budget guidance: Reconcile the land amount, clearing, grading, utilities, well or septic work, surveys, permits and other eligible project costs against the construction contract and itemized budget. Record each expense once. An allowance already included in a builder’s contract should not also be added as a separate charge. A per-square-foot house estimate is not a complete land-and-construction budget. Financing remains subject to the approved contract, budget, appraisal and loan requirements.
Work or professional services needed before closing may require upfront payment. Keep invoices and proof of payment and have SAM confirm treatment before spending. The same prepaid expense cannot receive both reimbursement and an equity credit. Approval of an expense does not guarantee an immediate cash reimbursement.
What if material costs rise or I request a change after closing?
SAM’s current project requirements: The project budget includes a contingency of 5%, or 10% for Texas projects. Confirm the amount and basis in your approved budget and loan documents. Disbursement requires the applicable approvals; unused funds are handled under the loan documents and should not be assumed to be cash back.
Jason explains that a borrower-requested change that increases the budget is not automatically financed. Confirm the revised cost, funding source and required approvals before authorizing work. Contract or budget changes may require renewed project review.
Should I apply before I have land, plans and a builder?
Jason recommends starting the financing conversation early so SAM can help organize a realistic plan. Applying early does not mean the project is ready to close. Read his real site-plan and land-equity examples, including a drainage easement identified before construction.
Request a VA construction project review with your state, land ownership or purchase status, builder and plans status, estimated budget and intended start date. Financing remains subject to eligibility, appraisal and lender approval.
