Introduction to VA One-Time Close Construction Mortgages
The VA One-Time Close construction loan is offered with the same terms as any other VA home loan. It features no down payment in most cases, no mortgage insurance requirement, and there is no penalty for early payoff of the mortgage.
VA construction loans are a unique type of mortgage loan, but even a qualified first-time home buyer is permitted to apply. But there are things a borrower should know about these loans. One important issue--time.
Building a home on your own lot means you will need to build in time for the construction to complete--you’ll need to anticipate keeping your current housing (or making other housing arrangements) long enough for the construction phase to complete, have inspections completed, etc.
The benefits of taking that extra time are obvious--the ability to approve the design of your home, choose the materials you prefer and be involved in the decision making process for other aspects of the home.
VA construction loans are for approved housing types--some types of home cannot be approved under this program. These include:
- Barndominiums (metal buildings with inside living quarters)
- Kit homes
- Log cabin homes
- Shipping container homes
- Stilt homes
- Solar-powered homes
- Tiny homes / tiny houses
- Wind powered homes
While VA construction loans don’t require a down payment in most cases, borrowers with FICO scores that would require money down will be required to provide the funds without outside assistance. The same is true of those who don’t have to make a down payment but choose to do so anyway to lower the amount of their VA loan funding fee or to cut the total cost of the loan overall.
VA construction loans may have a few extra restrictions compared to buying an existing construction home, but they definitely provide an advantage for people who want a more customized home from Day One.
FHA, VA, and USDA: One-Time Close Loans
Want More Information About One-Time Close Loans?
We have done extensive research on the FHA (Federal Housing Administration) and the VA (Department of Veterans Affairs) One-Time Close Construction loan programs. We have spoken directly to licensed lenders that originate these residential loan types in most states and each company has supplied us the guidelines for their products. We can connect you with mortgage loan officers who work for lenders that know the product well and have consistently provided quality service. If you are interested in being contacted by a licensed lender in your area, please send responses to the questions below. All information is treated confidentially.
FHA.com provides information and connects consumers to qualified One-Time Close lenders to raise awareness about this loan product and to help consumers receive higher quality service. We are not paid for endorsing or recommending the lenders or loan originators and do not otherwise benefit from doing so. Consumers should shop for mortgage services and compare their options before agreeing to proceed.
Please note that investor guidelines for the FHA and VA One-Time Close Construction Program only allows for single family dwellings (1 unit) – and NOT for multi-family units (no duplexes, triplexes or fourplexes). In addition, the following homes/building styles are not allowed under these programs, including but not limited to: Kit Homes, Barndominiums, Log Cabin Homes, Shipping Container Homes, Stilt Homes, Solar (only) or Wind Powered (only) Homes, Dome Homes, Bermed Earth Sheltered Homes, Tiny Homes, Accessory Dwelling Units, or A-Framed Homes.
Contact Us: Send us your Request – Spam Safe
Please send your email request to [email protected] which authorizes FHA.com to share your personal information with one mortgage lender licensed in your area to contact you.
1. Send your first and last name, e-mail address, and contact telephone number.
2. Tell us the city and state of the proposed property.
3. Tell us your and/or the Co-borrower’s credit profile: Excellent – (680+), Good - (640-679), Fair – (620-639) or Poor- (Below 620). 620 is the minimum qualifying credit score for this product.
4. Are you or your spouse (Co-borrower) eligible veterans? If either of you are eligible veterans, down payments as low as $0 may be available up to the maximum amount your debt-to-income ratio per VA will allow – there are no maximum loan amounts as per VA guidelines. Most lenders will go up to $1,000,000 and review higher loan amounts on a case-by-case basis. If not, the FHA down payment is 3.5% up to the maximum FHA lending limit for your county.
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