For many Veterans, the dream of owning a home begins with a VA One Time Close Construction Loan. This unique loan allows Veterans to buy land and build a custom home tailored to their needs. Offered by Veterans Lending Group, the VA Construction Loan simplifies the home-building process. Here’s everything you need to know.
What is a VA Construction Loan?
A VA Construction Loan is a mortgage designed for Veterans who want to build a new home. Unlike traditional construction loans, it combines the construction loan with a permanent mortgage, requiring only one closing. This reduces costs and simplifies the process.
Key Benefits of a VA Construction Loan
- Single Closing: Only one closing is needed, reducing hassle and costs.
- Financing Options: All costs can be added to the loan amount if there is room in the approval and appraised value, minimizing out-of-pocket expenses. Out-of-pocket expenses for land feasibility and realtor commissions can be recaptured with the initial draw.
- Extended Rate Locks: Lock in your interest rate for up to 360 days with options to adjust.
- In-House Servicing: Consistent support from Veterans Lending Group throughout the loan process.
- Upgrade Contingency: A 2% contingency fund covers unexpected costs.
- Closing Draw: A 10% draw is available at closing to kickstart your project.
- Digital Management: Manage draws and track progress through the OneSite digital portal with VIP concierge service.
Eligibility and Requirements for a VA Construction Loan
- Loan Limits: Up to $1 million at 100% LTV and up to $2 million at 95% LTV.
- Credit Scores: Minimum score of 620 for loans up to $766,550, 640 for loans up to $1 million, and 660 for loans up to $2 million.
- Debt-to-Income Ratios: Maximum DTI of 55% for loans up to $1 million and 50% for loans over $1 million.
Explore Your Building Options
Building Process: Steps and Expectations
- Builder Selection: Choose from approved builders to ensure a smooth project.
- Appraisal Process: An appraiser will evaluate your home plans and specifications before closing.
- Draw Schedule: Flexible draw schedules ensure funds are available as needed.
- Construction Management: Use the OneSite portal for efficient communication and draw processing.
- Loan Modification: Once construction is complete, the loan converts to a permanent mortgage.
Benefits for Builders
- Reduced Risk: Secure financing reduces buyer fallout risk.
- Flexible Draw Schedule: Choose between percentage of completion or line-item draw schedules.
- Quick Funding: Draw requests processed within five days.
- Simplified Approval Process: Easy approval for builders to start projects quickly.
- 10% Closing Draw: Immediate funds to begin construction.
Final Thoughts on the VA Construction Loan
Building your dream home is a significant journey, but with a VA Construction Loan from Veterans Lending Group, it’s a streamlined and rewarding process. Enjoy benefits like single closing, no payments during construction, and extended rate locks. Whether you’re building a single-family home or a unique structure, this loan offers the flexibility and support you need. Reach out today to learn more about how we can help you build your dream home!