The Department of Veterans Affairs offers qualifying servicemembers and veterans a no-money down VA home loan that can be used to buy a home with no VA loan limit for first-time users or those who have full VA home loan entitlement. Home Purchase and Refinance Loans

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VA Construction Loans for Veterans

April 21, 2021

The Department of Veterans Affairs offers qualifying servicemembers and veterans a no-money down VA home loan that can be used to buy a home with no VA loan limit for first-time users or those who have full VA home loan entitlement.

But what some veterans and servicemembers don’t realize? Their VA home loan benefits extend farther than just purchase loans for existing houses. You can also use a zero downpayment VA mortgage to build a home from the ground up. 

You select the plans, you work together with the lender to establish a timeline for the loan and construction, and have only ONE loan application, loan approval process, and closing date.

VA One-Time Close Construction Loans

A no-money-down home loan is a distinct advantage for the veteran who needs to save money up front on the mortgage. And when it comes to construction loans, putting zero down means you can use money that would be set aside for that down payment on a non-VA mortgage for other aspects of your construction project.

What aspects? The borrower selects the design, which may include the option to include standard features (countertops, wood selection, fixtures, etc.). 
Having extra money to put toward things like choosing a granite countertop instead of a cheaper option is a great thing to have. And borrowers who already own the land they want to build on will find the option to use land equity as a down payment get a further advantage in their construction loan.

Land Equity as Your VA Loan Down Payment

By using land equity as a down payment, VA borrowers get the benefit of a reduced VA Loan Funding Fee, which is required in all VA loan transactions unless the borrower is exempt (usually by receiving or being qualified to receive VA compensation for service-connected disabilities). A reduced VA loan funding fee means freeing up even more funds for the borrower who can potentially use that money to upgrade the features in the home as mentioned above.

Veterans are uniquely well-suited for a VA One-Time Close construction loan because in many cases they are looking for a place to settle down--some may want to build their forever home and the VA construction loan option is perfect for these borrowers.

Rising Demand for Construction Loans

It’s expected that demand for VA construction loans will dramatically increase in 2021 and beyond--especially with a trend of homeowners leaving crowded cities in favor of more spread-out rural areas due to worries over coronavirus and related concerns.

Veterans and currently serving military members who aren’t sure whether to build or buy should explore their One-Time Close options in addition to looking for existing construction. A VA construction loan can provide a distinct financial advantage for military families, retirees, and those who are about to retire or separate from military service.


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Construction Loans at 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), the VA (Department of Veterans Affairs) and the USDA (United States Department of Agriculture) 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. provides information and connects consumers to qualified One-Time Close lenders in an effort 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, VA and USDA 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: Kit Homes, Barndominiums, Log Cabin Homes, Shipping Container Homes, Stilt Homes, Solar (only) or Wind Powered (only) Homes.

Your email to [email protected] authorizes to share your personal information with a 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 $750,000 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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