We Are VA Construction Loan Experts
Get Started Today

Start the easy application process now!

"*" indicates required fields

Step 1 of 4

Or Call Now For Help!

(855) 701-2816

VA Construction Loan

Experienced, Professional VA Construction Loan Experts Supporting Veterans

As VA loan experts, we take pride in offering VA loans that help make life easier for veterans. Military life can be challenging, requiring frequent relocation that can cause stress in veterans’ families.

Military families can build their dream home utilizing their VA loan eligibility and our VA construction loan one time close program. VA loans have relaxed credit standards, do not require a down payment, and can help to simplify the construction loan process.

Our experts at Security America Mortgage are always happy to help with a personalized and hands-on approach to helping veterans access the best deal and best service!

VA Construction Loan - Security America Mortgage

What Is A VA Construction Loan?

VA construction loan is designed to help veterans build their own homes and that’s especially handy when there is a limited supply of homes on the market. Currently the VA construction loan that we offer is only for a 30 year term. However, you can always refinance into a 15 year loan in the future after 6 months of payments as long as there is a net tangible benefit for you. Veterans can use the VA construction loan to construct on land they already own, or you can finance the cost of purchasing land with a construction loan.

The cost of building a home and the land can be financed in a one time close VA construction loan. A VA Construction loan can be a wise way to utilize the rightfully earned VA loan benefit. Building your own home might be better than buying one already built especially if demand is high in the housing market. VA construction loans are available with a 0% down payment and competitive interest rates. The appraised value must be greater than the loan amount needed to get 100% financing.

The VA construction loan can fund the construction of modular homes, site-built homes, and manufactured homes. The VA construction loan is completely different from a traditional construction loan. Traditional construction loans are usually two closings with a construction phase and permanent phase. Oftentimes the construction phase has a variable rate and you can’t get a fixed rate until the home is built and the second closing.

VA Construction Loan - Security America Mortgage

How Long Does It Take To Close On A VA Construction Loan?

Many factors go into the timing of the process. If you have land, an approved builder, approved plans and were pre approved in advance the process could take under 30 days. If you are pre approved but don’t have your site, builder or plans then this process will depend on you. Delays in the process can occur when you don’t have an approved builder. Not all builders are approved with the VA and us so make sure you do that up front. If you don’t own your land yet but plan on putting it under contract then make sure the seller is flexible on the closing date or allow yourself 90 days so that you can make sure you have your builder and plans approved.

VA Construction Loan Credit Requirements

The VA construction loan comes with lenient credit requirements, making the loan more accessible to veterans with lower credit scores.

The VA construction loan requirements are as follows:

  • 620 Minimum Qualifying Credit Scores for all qualifying borrowers but sometimes a 640 is needed based on loan submission findings.
  • 620-659: A minimum of 2 qualifying credit scores are required for all qualifying borrowers. Use the middle score if 3 credit scores or the lower of the two if 2 credit scores.
  • 660+: A minimum of 1 qualifying credit score is required for all required borrowers.
  • The lowest representative score from all borrowers will be used for the qualification process.

VA Construction Loan Benefits

There are many benefits to using a VA construction loan over a traditional construction loan. These benefits are applicable to all kinds of VA loans compared with a traditional mortgage and refinancing loans.

As long as the appraised value covers the loan amount then there is a good chance that you won’t have to put anything down. Also, if you have land equity this will help even more. There are many factors that can affect the appraised value. Confirm there are comparables to support value with your builder and be careful with upgrades that raise your building costs but aren’t in other comparable homes. You may need to make a down payment if you’re using remaining entitlement and your loan amount is over $144,000. This is because most VA construction loan lenders require that your entitlement, down payment, or a combination of both covers at least 25% of your total loan amount.

Choose a VA Construction Loan lender that not only knows the VA loan guidelines but also the VA Construction loan One time Close guidelines.

When you have obtained your certificate of eligibility, you can begin the loan application process. To do this, you must choose a VA construction loan lender. Your VA lender will assign you a VA loan officer that will be your primary contact during the loan application process. At Security America Mortgage, we have a team of experts ready to guide you through your loan application and simplify the process.

2. Extremely Competitive Interest Rates

With a VA construction loan we lock in your rate for the time of construction and thereafter. Since it could take 3-12 months to build your home there is a chance that mortgage rate volatility could bring rates up during that period and you are protected from rising rates. After you live in the home for 6 months and make 6 months of payments you are also free to refinance with us if there is a tangible benefit to you. Many non One time close loans and other traditional construction loans have a variable rate during construction and when you lock your permanent rate after construction, rates could be higher. A VA construction loan one time close rate is more than a typical 30 day purchase rate because the market volatility and risk are built into this fixed rate.

3. No Mortgage Insurance

A VA loan doesn’t have mortgage insurance that is paid monthly. Instead, it has a more affordable version called the va funding fee. The VA funding fee is paid only once on a va loan. PMI is paid monthly, and the amount depends on the size of the loan, state of the market, and your financial history. For a conventional home loan, PMI ranges from 0.58% to 1.86% of the original loan amount per year.

The VA funding fee in 2022 is 2.3 percent when buying a home and using your VA entitlement for the first time. If your loan is still $200,000, that means your funding fee will equal about $4,600. That’s a one-time payment (unless you refinance) and considerably less than all your PMI payments combined on a comparable conventional loan. Considering these numbers, the VA funding fee is definitely less expensive than private mortgage insurance. Also, if you have a service related disability then there is a chance you won’t have any funding fee. In fact, Veterans injured during service are exempt from paying the VA funding fee if they receive disability compensation or have a disability rating of 10% or higher. Surviving spouses of Veterans who died in the line of duty also qualify for a funding fee exemption. You may be eligible for a refund of the VA funding fee if you’re later awarded VA compensation for a service-connected disability. The effective date of your VA compensation must be retroactive to before the date of your loan closing. If you think you’re eligible for a refund, please call your VA regional loan center at 877-827-3702. A subsequent use of your VA loan entitlement will bring the funding fee up to 3.6% if you are putting no money down or less than 5% down. The VA funding fee is completely tax deductible.

4. Qualification Standards

One of the most important aspects of the VA Construction loan is that you don’t have to requalify. In general the qualification standards of VA loans are less credit stringent than conventional loans. A Veterans credit history over the last 2 years is more important than the distant past and oftentimes a Veteran with borderline credit around 640 has a better chance at a VA loan than a conventional loan. The VA itself doesn’t specify a minimum credit score. VA construction loan lenders will set their own credit score requirements. At 620 you have a better chance than 600 but less of a chance for approval than 640. There are many factors at play such as how your credit has been over the last 2 years and your debt to income ratio. If your credit isn’t quite where it needs to be for approval then oftentimes you can make a few changes to get your score to where it needs to be to qualify.

Seller Contribution To Closing costs

When purchasing a home you can get up to a 4% seller contribution on your closing costs from the seller. Reasonable and customary loan costs on VA home loans can be covered too. Total contributions may exceed 4% because standard closing costs do not count toward the total. With a VA construction loan there is no seller so the above doesn’t apply. However, we can work with your builder to see if Builder credits can serve a similar purpose.

ITIN Loans - Security America Mortgage

VA Construction Loan Process

The VA construction loan process can be pretty challenging to take on alone. Luckily, our experts at Security America Mortgage take a hands-on approach to the loan process and can guide you through each step of the VA construction loan process.

Obtain Certificate Of Eligibility

The first step in your VA loan application is to obtain a certificate of eligibility. Security America Mortgage is happy to help you get your certificate of eligibility. Simply fill out the easy application form on our website. We have access to the LGY system, meaning we can help you get your certificate of eligibility in a matter of seconds.

When completing the application form, you may need to provide some extra documentation as evidence of your service. You will generally need to provide a statement of service and a DD form 214. A DD form 214 is a certificate of release or discharge from active duty, and a statement of service is a letter from your commanding officer denoting the extent of your service.

Specific eligibility requirements you must meet

To obtain your certificate of eligibility and access VA loan benefits, there are specific eligibility requirements you must meet. The following should apply:

  • You are an active service member with at least 90 days of continuous service.
  • You are a veteran who has served at least 181 days of active duty.
  • You are a current National Guard member who has served at least 6 years.
  • You are a discharged National Guard member who has served at least 6 years.
  • You are a National Guard or Reserves member who has been called to active duty and served 90 days of active service.
  • You are a widowed and un-remarried military spouse whose partner has died in the line of duty or due to a service-related injury. (You will need to provide evidence of your Dependency and Indemnity compensation).

If these standards apply to you, you should have no trouble obtaining your certificate of eligibility.

VA Construction Loan - Security America Mortgage

Choose a VA lender that not only knows the VA loan guidelines but also the VA Construction loan One time Close guidelines.

When you have obtained your certificate of eligibility, you can begin the loan application process. To do this, you must choose a VA lender. Your VA lender will assign you a VA loan officer that will be your primary contact during the loan application process. At Security America Mortgage, we have a team of experts ready to guide you through your loan application and simplify the process.

Apply for a VA Construction loan one time close.

Start our smart loan application here at https://jasonnoble.floify.com/ Jason Noble of Security America Mortgage specializes in VA loans and the VA construction loan. It’s important that we pre-approve you first.

Find VA-Approved Builder

Once we have pre qualified you then you should find a builder that is approved with the VA. Also, we will provide a packet that will approve your builder with us. We have this extra layer of protection to protect everyone’s best interest. If you already have a builder in mind, you can contact your VA loan officer at Security America Mortgage, and we can help you get them registered with the VA and us. The general contractor/builder must carry sufficient insurance through a current general insurance policy. Also, there will be inspections of the property during construction per VA regulations and guidelines.

Also, you can use the helpful VA-approved builders’ map on our website to find a builder in your area. The Department of Veterans Affairs website has tools to help you find a VA registered builder and determine if a builder is VA approved. Please note Security America Mortgage may not approve some VA registered builders, so be sure to check they are approved with us before enlisting their services.

Decide what land you want to build on and if you want it to be a part of your VA construction loan closing or if you will have your land before then.

If you already own your land then you make the process a little easier. If you don’t own your land yet then it’s important that you either close on it in advance or make sure that there is plenty of time to have your builder and plans approved before the closing date.

Complete Property Appraisal

A property appraisal is required in the VA construction loan process. The property appraisal process is designed to ensure that you are not being overcharged for the home’s construction and gives the lender an estimate for the home’s value once construction is complete. The property appraisal will also determine if the house meets the VAs minimum home requirements.

Closing and Construction

Underwriting and approval of the permanent loan is done before construction begins! There will be an administration fee built into your closing costs that covers construction payments during the construction of your home. This means that you don’t have any out of payment costs during construction. Your first mortgage payment won’t be due until you are living in your new home! After all conditions have been cleared, closing and construction can begin! A 5% contingency will be built into the contract price to protect all parties from potential rising costs of materials but this doesn’t apply to manufactured homes. If the contingency isn’t needed then you’ll receive a credit and won’t lose that money!

Final Inspection

Once construction on the property is complete, there will need to be a final inspection to ensure the funds from the VA construction loan have been used in line with VA guidelines and ensure the home meets the minimum housing requirements. Once the final inspection is complete, you will be able to make plans to move into your new home, and you can start making repayments.

Up to 100% financing On Your VA Construction Loan: Build Your Dream Home Today!

Do you want to build your own home but are worried about the upfront costs? Don’t worry; there is no down payment required with a VA construction loan. You can build your dream home without facing hefty upfront costs and you might not need a down payment. At Security America Mortgage, we understand that there is a high demand for housing, and we want to make it easier for veterans to build their own homes and access housing despite the lack of supply. You can even finance the purchase of land with a VA construction loan!

VA Construction Loan - Security America Mortgage

VA Construction Loan Lenders

To make use of your VA construction loan benefits, you will need to enlist the services of a VA construction loan lender. At Security America Mortgage, our experts are on hand to guide you through the loan process with a friendly and personalized approach. The VA construction loan process doesn’t have to be stressful.

Easy Application Process- Get Your Loan With Security America Mortgage!

To get your VA construction loan application started, simply use our certificate of eligibility application form. We can get your certificate of eligibility in seconds, thanks to our access to the LGY system. Once you have your certificate of eligibility, you can move forward with your application, which is easier with our supportive team’s help.

Why Choose Security America Mortgage?

Security America Mortgage is an experienced VA lender who can help you build your own home without fuss or stress. We take pride in offering our services to make VA loans more accessible to veterans, in thanks for their service. Our competitive interest rates and no down payment loans can help you to build the home of your dreams without worrying about upfront costs.

FAQ of VA Construction Loan

When do mortgage payments begin with a VA construction loan OTC? Mortgage payments begin once the home is complete, has had a final inspection and your home is “move-in ready”
They have an interim draw option and no draw option.
15 year and 30 year terms are available.
If the base loan amount is under 726,200 a 620 middle score is needed and if the loan amount is over 726,200 a 640 is needed. Note that the VA doesn’t set the minimum credit but lenders do.
1.5 million but exceptions can be made. The VA doesn’t set the limit. Lenders set the limit.
Builder must provide a one-year VA Builder’s warranty. General Contractors and builders must be registered with the VA and carry necessary insurance through a current general insurance liability policy.
1 unit Site Built, new manufactured housing, multi-wide housing, modular home
  • 2 Units
  • 3 Units
  • 4 Units
  • Co-Ops
  • Manufactured Housing Units built prior to June 15, 1976
  • Manufactured Housing in a Condominium Project
  • Manufactured Housing that has been traded
  • Mixed- Use
  • Under Construction
  • Off Grid
  • Properties with commercial influence are subject to additional review.
  • Any property where marijuana is grown or processed inside the home or on the property, regardless of the
  • quantity or state law is unacceptable
  • SAM will not permit properties with more than 100 acres
  • If the utilities are off at the time of the inspection, the Appraiser must ask to have them turned on and complete all requirements under Mechanical Components. However, if it is not feasible to have the utilities turned on, then a pressure test and electrical test is required and must be completed by an appropriately licensed professional.
Down payment assistance, in the general sense, is not available for VA loans. When facing an appraisal shortage if the Veteran chooses to pay the difference between the sales price/acquisition cost to meet appraisal value those funds must come from the Veteran. The funds can be gifted from a family memember too.
The contractor must be a subcontractor of the general contractor or the general contractor must build the pool. States include Texas, Louisiana, Mississippi and Texas for SAM. The pool must be in ground. Utilities must be turned on for appraisal inspections
Yes, if you’ve owned the land for 12 months or more by the closing date
Yes, as long as the build contract is market price, no exceptions
Aside from being approved like you would for a VA purchase loan, you need to have a builder contract with plans, builder must be approved by us and have a registered builder ID with the VA. Depending on your county, there may also be building permits and septic permits that need to be approved before closing. You must also have the land under contract or own the land that you would be building on.
2 Units, 3 Units, 4 Units, Co-Ops, Manufactured Housing Units built prior to June 15, 1976, Manufactured Housing in a Condominium Project, Manufactured, Housing that has been traded, Mixed- Use properties, properties Under Construction. Properties with commercial influence are subject to additional review. Any property where marijuana is grown or processed inside the home or on the property, regardless of the quantity or state law is unacceptable. SAM/AFR will not permit properties with more than 100 acres but perhaps you can subdivide.
Manufactured, modular, and stick built properties are options. There are many different types of materials such as drywall, plywood, 2 x4s, epoxies, roofing materials, nails, concrete, tile, flooring, fixtures, etc. Your plans will be approved by underwriting and the builder we be approved by SAM, AFR and the VA. You cannot build a kit home, log home, bamboo home, metal home, tiny home, storage container home or bardominium (Non traditional construction types aren’t eligible)
Builders Risk Policy is a unique type of property insurance which indemnifies against damage to buildings while they are under construction. Builder’s risk insurance is “coverage that protects a person’s or organization’s insurable interest in materials, fixtures and/or equipment being used in the construction or renovation of a building or structure should those items sustain physical loss or damage from a covered cause.
The one time close provides interim construction financing, lot purchase if needed and a permanent loan wrapped into on. When you convert from the construction phase of the loan to permanent you don’t have to requalify. This saves money on closing costs such as a second appraisal.The one time close provides interim construction financing, lot purchase if needed and a permanent loan wrapped into on. When you convert from the construction phase of the loan to permanent you don’t have to requalify. This saves money on closing costs such as a second appraisal.
Interest payments, funding fee, inspection fees, commitment fees, title update fees, hazard insurance during the construction. (OR) A single construction fee which includes the construction interest, as well as: construction draw inspections, construction closing coordination, construction underwriting and title updates.
As little as 30 days. Average 60 days. Could take up to a year in some cases.

We are dedicated to
serving Those who served.

VA Construction Loan - Security America Mortgage
VA Construction Loan - Security America Mortgage