VA Single Close Construction Loans
You want to build your own home but, like many people, you might be unsure where to start.
As a veteran or active duty service member, your VA benefits keep it simple. They extend beyond traditional purchase loans with options to finance building and affording the home you’ve been imagining.
A VA single close construction loan allows you to build your home using the benefits you’ve earned. Save time and money through a simplified financing process with no down payment needed and a single loan for both the construction and long-term mortgage of your new home.
What is a VA Single Close Construction Loan?
The Veterans Administration single close construction loan is a popular option for veterans or those with other military involvement. It offers financing that is easy to qualify for and an overall process that makes paying for and building your home simpler to manage.
The U.S. Department of Veterans Affairs (VA) insures VA single close construction loans to make financing more attainable to benefit those who have ties to the military.
Because these loans are government-backed by the VA, interest rates are kept competitively low and borrowers aren’t required to make a down payment.
With a VA single close construction loan, you can finance the purchase of your lot, the construction of your new home, and the long-term mortgage that will be needed to afford your home once it’s built.
The streamlined process allows you to close on your home loan once rather than having to secure two or more separate loans for each stage of the process.
You qualify once and have a single appraisal, loan originator, and closing process. This reduces the time it takes to build and move into your new home, protects you from unforeseen circumstances down the road, and saves you from paying double or triple closing costs.
Home construction is complicated and requires many moving parts. Single close construction loans are made to help simplify the process.
How to Get a VA Single Close Construction Loan
If you’d like to see whether you qualify for a VA single close construction loan, connect with us. To get you started, we’ve outlined the steps and qualifications needed to help you understand the process.
The Financing Process
By sharing basic information about the home you want to build, we’ll work with you to see if a VA single close construction loan meets your needs and whether you can get pre-approved for the loan.
Next, we’ll begin a more in-depth underwriting process to review your income, credit, ability to repay the loan, and other eligibility requirements. This will include demonstrating proof that you’re eligible for VA benefits, either because you’re a veteran, active member of the armed services, or qualifying spouse.
We’ll also work with you to ensure your builder is registered through the VA site, as well as to determine what the cost and timeline will be to build your home and finance it.
We’re with you through each step, leading to a simple and efficient closing so that you can move forward with building your home.
Once the loan closes, you’ll begin construction on your new home within 30 days of the closing date. Your construction team will provide you with regular updates on the progress of your home. We’ll manage the construction phase, including ordering draw inspections, any state-required surveys and inspections, and VA requirements.
Loan Requirements to Meet
These are some of the standard requirements often needed to qualify for a VA single close construction loan. If you have questions about these requirements, we’re here to help.
- You need to be an eligible veteran, spouse, or be on active duty with the United States military.
- In most cases, it’s best to have a credit score of 640 or higher.
- The Lender must approve the builder.
- Contractors must be registered with the VA.
- An appraisal will need to be done to assess the value of the project.
- All standard guidelines for traditional VA loans will also apply to the single close construction loan.
VA Single Close Construction Loan FAQs
Financing the build and long-term mortgage of your new home is an important step in beginning this process. It’s ok to have questions. We’ve compiled answers to the frequently asked ones, but don’t hesitate to ask more.