VA Construction Loan | VA Construction Loans for Building
Veterans can use their existing lot or buy a lot and obtain VA construction loans, all in one closing. There’s no need to do a “two-time close” because a VA one-time close is much more cost effective and beneficial for Veterans by keeping costs down. With a VA construction loan in Texas, you can build your dream house without a down payment, up to $2 million and more, with exceptions allowed. Since this is still a VA loan, it follows the same basic guidelines as a regular VA loan.
Using a VA Construction Loan, also known as a “VA one-time close,” to fund your build and cover the land’s cost is the solution to getting the home that you want, all within a single VA permanent mortgage. Compared to traditional construction financing, this expedited procedure saves you both time and money by being a one-time close.
Schedule a call with us or contact us directly to learn more about VA Construction Loans. We look forward to answering all of your questions and helping you understand all your VA home loan benefits.
VA Construction Loans for Texas Veterans: Things to Know
- Benefits and Eligibility: Service Members who are eligible for VA benefits can apply for a VA construction loan or a VA One-Time Close loan. These loans come with several perks, including no down payment and no private mortgage insurance (PMI). These advantages are particularly beneficial in Texas, which offers a wide variety of real estate options, from rural to urban locations, perfect for creating a custom home to meet a Veteran’s specific needs.
- Two-Time Close Loans: Texas veterans may opt for a two-time close loan as an alternative. This often occurs if the Veteran was unaware of the VA construction loan option and has already begun with a standalone construction loan. However, it is not the best choice because it requires two separate closings, which increases the overall cost of the project.
- Locating a Texas Builder: Choosing a builder is an essential step. We have worked with many builders and are happy to provide you with a list of builders already approved with us. If they are not approved, we would love to work with you and your builder to get them approved.
2 Types of VA Construction Loans:
- One-Time Close Loans: The One-Time Close construction loan is a cost-effective choice for Texas veterans. It combines the construction loan, land, and permanent mortgage into a single loan, streamlining the process, reducing closing costs, and locking in interest rates upfront.
- Two-Time Close Loans: Texas veterans may opt for a two-time close loan as an alternative. This often occurs if the Veteran was unaware of the VA construction loan option and has already begun with a standalone construction loan. However, while there are two types, it is not the best choice because it requires two separate closings, which increases the overall cost of the project. This option may be beneficial if the Veteran does not want to use a VA-approved builder or wishes to build the home themselves. In such cases, a two-time close would be necessary.
Your Building Contractor is not VA Approved?
If your builder is not VA-authorized, that is no problem at all. As of this year- 2026, the builder no longer has to obtain a VA ID number.
We do however require the builder to be approved with our lender. We will send you or the builder our builder packet to complete and return. Please contact us directly at otc@ccm.com to obtain this packet.
Why Use Your VA Construction Loan in Texas for Financing?
Finding a home that meets all your specific needs can be challenging. That’s why opting for a VA construction loan allows you to create exactly what you’re looking for. With a VA construction loan, you enjoy all the same benefits as the regular VA loan program, making this loan option very attractive. Some of the key benefits include:
- Less money out of pocket:
With a VA construction loan, no down payment is required. The builder is allowed to cover your closing costs through the price of the build, and there are no mortgage payments during construction. This allows you to purchase your lot and build your home with minimal out-of-pocket expenses if desired.
- VA builder and lender approved:
Having both a VA-approved builder and lender protects the Veteran from major risks. A builder’s warranty is required, with the VA mandating either a 1-year builder’s warranty or a 10-year insured protection plan. Additionally, the lender requires the builder to provide a checklist of items that ensures the quality of the builder’s work.
- Our VA Construction Management Team:
Our VA construction management team oversees the entire process from funding to the completion of your home. We manage the inspections, draws, and modifications, and work directly with the builder to help ensure a smooth build.
- Lower Rates and Long Rate Lock Terms with a Float-Down Option:
With a VA construction loan, you will have several rate options to choose from. These rates are generally lower than those of standard construction loans. Additionally, we offer a 9-month or 12-month rate lock option, depending on how long your home takes to build. Once you lock in your rate and close on your construction loan, you have the ability to do a one-time float down within 30 days of your build/move-in date being complete. This gives you the opportunity to secure an even lower rate than the one you initially locked in at the time of closing on your construction loan.
Construction Application and Approval Process for A Texas VA Construction Loan
Ready to get started on exploring the VA construction loan option for you? Below are the steps taken from start to finish.
- Loan Application :
The first step is to submit your application with us. We review your file as we would for a regular VA purchase to ensure you meet the VA eligibility, credit, and income requirements. To start your application, click: Apply Online. This will take you directly to an external link to the application site.
- Lender Pre-Approval:
Once you submit your application, our team will review it and contact you to go over the details. We will guide you in understanding how much you qualify to build and dive deeper into the specifics of VA construction and your building goals.
- Selecting a Builder:
Once you have received your pre-approval for your home loans, we begin engaging with the builder. If you already have a builder selected, we will reach out directly to them to obtain the required items to get your builder approved by the lender.
- Builder Contract, Budget, and Appraisal:
After selecting your builder, you will work with them to obtain a construction contract and a budget. We will then put together a detailed loan estimate based on the figures provided by the builder. Once that’s complete, your loan disclosures are sent, and a VA appraisal (value is subject to completion of construction) is ordered.
- Closing and Construction:
The construction stage begins after the closing. Once construction starts, our construction management team stays in close contact with the builder to ensure everything is proceeding as planned and remains in compliance with VA guidelines.
- Final Inspection and Transition to Permanent Financing:
Upon completion, a final inspection verifies that the house meets all VA, Texas, and local authority requirements. The last stage in the home-building process for service members is the conversion of the loan to permanent financing
What Happens After Your VA Construction Loan Closes
Closing on your VA Construction Loan is an exciting milestone, but your journey does not end there. Upon loan closing, construction will begin, and our team will be by your side throughout the process. By coordinating draw schedules and final inspections, we will help you transition from construction to your finished home.
- Loan Successfully Closed: The loan for your VA Construction Loan has closed, and you are now ready to begin construction. All financing is complete, your plans are approved, and your builder is ready to start construction. This is the beginning of seeing your dreams take shape!
- Connect With Your Dedicated Draw Specialist: Our construction management team coordinates draw requests, inspections, and funding releases to help keep your project moving forward. This person will be your main contact throughout the construction phase and is available to answer your draw questions, provide updates on the build, and address anything else related to the project.
- Build Updates and Draw Releases: A VA Construction Loan dispenses funds at different intervals as construction progresses rather than all at once. As each stage of construction is completed, inspections verify the work before funds are released for the next phase. This process helps protect your investment and keeps construction moving according to plan.
- Managing Project Changes: Whether you’re building in Houston, Dallas-Fort Worth, Austin, San Antonio, or a rural Texas community, project adjustments are common during construction.
Construction doesn’t always stay exactly as planned. Perhaps you want to change an upgrade or fixture, move a wall, or make modifications based on what you encounter on the job site. Common changes include upgraded flooring, expanded patios, kitchen modifications, or material substitutions due to availability.
If you need to make changes to your construction plans, our team will guide you on the potential effects of change orders on your VA Construction Loan, budget, timeline, and approval. - Stay Updated Every Step of the Way: With custom building, a lot goes on. It is good to keep open communication so you know what is going on and stay within your expectations. Our team will keep you informed throughout the whole process of your VA Construction loan.
- Final Inspections: When your house is almost finished, inspectors complete final inspections. These inspections verify that the house has been constructed in accordance with the plans, lender’s specifications, and current building codes. They are among the very last steps before you move into your home.
- Final Funding Release: Upon completion of all accepted work and completion of inspection requirements, your final draw is paid. This will finalize the construction portion of your VA Construction Loan and position it to transition to a permanent loan.
- Rate Reduction Opportunity: At times, depending on market conditions, eligible borrowers may be able to secure an interest rate reduction before the loan becomes a permanent mortgage. We assess the market for such opportunities and advise on whether pursuing a reduced rate could be a long-term benefit for you.
- Transition to Permanent Loan: One of the most attractive benefits of the VA Construction Loan is that it allows you to move directly from construction financing to permanent financing. This can eliminate the need for a second closing and any additional refinancing requirements. The VA One-Time Close Construction Loan simplifies the process, saving you time, money, and paperwork.
- Your Dream Home Awaits: The last step of your VA Construction Loan is also the most satisfying. You can relax and settle in after construction is done. The loan converts to permanent financing, and you enjoy the home you’ve customized for your family, lifestyle, and your future needs. From beginning to end, our team is here to serve Texas veterans.
How do we help you with a Texas VA construction loan?
Our team is your reliable partner in navigating VA Construction loans in Texas. We work with you and your builder to provide the funding backed by the Department of Veterans Affairs. This is how we help:
- Manage the Process from Start to Finish: We help you with every stage, from application to processing, to underwriting and appraisal to closing. Then after closing, managing the construction process from start to finish.
- Consistent Communication with You and Your Builder: This is a significant project, and communication is key. We go above and beyond to solve any problems that arise. We can help your builder get VA-approved, guide them through the checklist of required items, and assist you in every way possible to make your dream home a reality.
- Loan Estimate Options: We offer multiple loan estimates for a VA Construction Loan, including 30- or 15-year fixed-rate options, loan amounts up to $2 million, and 9- or 12-month rate lock term options. We will review your construction numbers, income, provide multiple options, explain all the details, and help you choose the option that works best for you.
- Responsiveness: Throughout the entire process, we understand that responsiveness is key to getting things done on time. We want you to build your home and meet the timeline you have planned. Our goal is to support you in closing on your construction loan on time and ensuring your home is built within the planned time frame.
Why Choose Us for a VA Construction Loan in Texas?
Shirley has worked with hundreds of Veterans over the past 20 years. She is very aware of the particular difficulties that Veterans face while trying to find better solutions for themselves and their families. She excels in navigating this loan lender maze and she is passionate about helping Veterans with finding what they are looking for. Answering their questions and providing the service they deserve.
Tips for a Successful VA Construction Loan Journey
A good VA Construction Loan experience is all about preparation, communication, and having the right team. By following these best practices, you will likely keep your project on track from approval to completion.
1. Choose a Builder With Construction Loan Experience
Choose a qualified, licensed builder who knows VA Construction Loan needs. The construction financing experience these builders have will enable them to estimate timelines, provide documentation, and minimize delays throughout the process.
2. Stay Engaged Throughout Construction
Your input is essential. Keep an eye on construction updates, raise any concerns you have, and communicate regularly with your builder and loan team. The more involved you are, the sooner you can address potentially costly problems.
3. Keep Financial Documents Accessible
You may need to submit additional information during construction, even after your VA Construction Loan has closed. Respond to these requests promptly to help prevent unnecessary delays.
4. Plan for Unexpected Expenses
Materials, labor, weather, and site conditions may influence a construction project. Having a financial cushion can help you handle unexpected costs without disrupting your project.
5. Review Change Orders Carefully
Construction alterations affect cost, schedule, and financing needs. Consider the effects before authorizing modifications, and then talk it through with your builder and construction lender.
6. Maintain Consistent Communication
Clear communication remains a key element in a successful VA Construction Loan project. Keeping open lines of communication with all parties ensures a unified team.
7. Trust the Process
The entire process of a VA Construction Loan is segmented and includes several draws and inspections to secure your funds. Sticking to this path will help ensure a smoother finish.
Important Reminders About Your VA construction loan
- Construction Funds Are Released in Phases: Your VA Construction Loan provides disbursements according to the approved draw schedule. Your draws are based on actual completed work verified by inspections before disbursement.
- Project Changes May Require Approval: Any substantial deviation from the plans, specifications, materials, or the project’s overall cost will likely require lender review and approval. Always discuss major plan changes with your loan team before making them.
- Construction Timelines Can Shift: Weather, material shortages, and labour availability can affect construction timelines. Allowing flexibility into your planning can prevent disappointment when the construction date changes.
- Communication Helps Prevent Delays: Prompt attention to requests from your lender, builder, or draw specialist is important to prevent your VA Construction Loan project from falling behind schedule.
- Keep Project Records Organized: Store all contracts, change orders, inspection reports, approvals, and project updates in one place. If all the documentation is in one place, questions can be answered efficiently throughout construction.
- Ask Questions Whenever Needed: Building a home is a large undertaking, and there’s a lot of information to sift through. If there is any ambiguity, do not hesitate to ask. Our team is here to assist you through the process of your VA Construction Loan.
- Focus on the Long-Term Goal: Each inspection, draw release, and milestone brings you closer to owning a home that’s perfect for you. The process may take some time, but you end up with a home tailored to your specifications and backed by the advantages of a VA Construction Loan.
Common VA Construction FAQ Types
- What Construction Products Do You Offer?
We offer VA Construction loans up to $2 million, as well as Conventional and FHA construction loans.
- What Are the Lender Fees Charged on a One-Time Close (OTC) Construction Loan?
We do not charge any origination fees on an OTC construction loan. However, if you choose to pay money toward your interest rate (discount points), that charge will depend on the rate you select.
- Can I Finance the Land into the Construction Loan?
Yes, you can finance the purchase of the land or pay off a lien if you already own the land at the same time as the construction loan. Construction must start within 60 days of closing.
- Are Barndominiums, Modular Homes, and Log Cabins Allowed?
Yes, as long as they meet appraisal requirements.
- If Construction Has Already Begun, Can You Do a One-Time Close?
No, in most cases, this creates a broken priority with the title insurance, which is required for the lender’s policy to ensure the lender is in the first lien position. However, we do evaluate all options to determine if an exception is warranted.
- What is a VA construction loan guaranty?
A VA construction loan guaranty is a guarantee from the Department of Veterans Affairs to a private lender that protects them against loss if the veteran defaults on their construction loan. This guaranty enables veterans to obtain construction loans with favorable terms, including potentially no down payment, to build a new home. The VA typically guarantees up to 25% of the loan amount.
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