Here’s a short Q&A with Susan Moeller, a VA Home Loan expert we’ve started working with recently, about the uniqueness and nuance of getting a VA loan for building a custom home.

Q: Nobody ever seems to talk about construction loans when it comes to the VA loan program. Does the VA even offer construction loans?

A: Yes, it does exist! If you fulfill the eligibility requirements for the VA Home Loan program, you may qualify for a $0 down construction loan to build a custom home.

Q: What is a VA One-Time Close Construction Loan?

A: It’s a $0 down construction loan that allows you to roll in all costs and fees. It’s a one-time-close loan product, which means that you finance the construction costs and permanent loan (i.e., the mortgage itself) at the same time before you even start building. This means you only have one closing before the construction begins.

One of the best parts of the VA construction loan is that it can have ALL costs rolled into it. Unlike a traditional loan where you have to bring money to the table at closing, the VA construction loan can include everything: closing costs, prepaids, and even the interest for the construction loan. You do not have to make any payments during the construction. This is almost unheard of in the construction industry!

Q: If I’m building a custom home on land I need to purchase, can I roll in the cost of the land as well?

A: Yes! Really, this is a 3-in-1 type of loan. You can finance the purchase of the land (commonly called a “lot loan”), the construction loan, and the permanent mortgage altogether. You don’t need to re-apply or re-qualify at the end of construction, and you won’t need a second appraisal.

Q: Who qualifies for the VA construction loan?

A: The eligibility requirements are set by the U.S. Dept of Veterans Affairs and include a few factors such as:

  • your length of military service (either continuous days or continuous months served, depending on the years)
  • your duty status
  • character of service

In addition to qualifying for a VA-backed loan, you will also need to meet your lender’s requirements for income and credit (our loans require a minimum FICO score of 620).

To recap, here are the benefits of using the VA One-Time Close Loan program for your construction loan:

  • The rate for the permanent financing is locked in prior to closing (and construction) and guaranteed.
  • No mortgage payments are required while construction is going on.
  • Interest is rolled into the loan, so you do not have to make interest payments during the construction period.
  • All costs can be rolled into your loan for a true $0 out-of-pocket construction loan.
  • The loan is 100% in place prior to construction with no risk of not qualifying at the end for the permanent financing after construction is complete.
  • 100% financing available

So what are you waiting for? If you think you’re eligible for a VA construction loan and want to build with Paramount Homes, contact me today, and I’ll help you get started!

Susan Moeller, NMLS #894694
Residential Mortgage Advisor
Email: [email protected]
Phone: (512) 645-4636

HomeLander Mortgage, LLC, 911 Ranch Road 620 N Ste 208B, Lakeway, TX 78734, NMLS# 2253576. Equal Housing Opportunity. All loans are subject to program guidelines and final underwriting approval. Licensed in Colorado.

Paramount Homes
Paramount Homes

Paramount Homes is a Colorado custom home building contractor that builds new homes across the Pikes Peak region, including Colorado Springs, Monument, Castle Rock, Woodland Park, and more. With over 30 years of experience, we have built and remodeled over $40 million worth of projects. Call us at (719) 331-4116 or contact us online for a quote or more information on building your dream home.