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: Thing 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.
- Texas Veterans Land Board (TVLB): Texas veterans can also explore the purchase program provided by the Texas Veterans Land Board (TVLB) in addition to VA construction financing. This resource can be used as the end financing for a two-time close and is often beneficial for those who are unable to secure a VA One-Time Close construction loan.
- Locating a Texas Builder with VA Approval: Choosing a VA-approved builder is an essential step. However, if your builder is not VA-approved, we can assist them in obtaining this approval. The Department of Veterans Affairs must approve the builder for you to utilize the VA construction loan program. You can visit VA Approved Builders list to find a registered builder.
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, we will assist them through the process of obtaining a VA Builder ID number. In most cases, an ID number can be issued within five (5) business days. Here are the necessary forms that need to be completed:
- Builder information and certification: On builder’s letterhead
- VA Form 26-421: Equal Employment Opportunity Certification
- VA Form 8791: VA Affirmative Marketing Certification
- Copy of the builder’s license, if required by a state or local authority
Once all forms are completed, you can email them to us at shirley.mueller@ccm.com, and we will send them directly to the VA for approval. Alternatively, you can submit them directly through the VA Service Portal.
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.
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 in helping Veterans with finding what they are looking for. Answering their questions and providing the service they deserve.
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.
Texas Vet Rates
Down payment: 0% & Term: 15, 20, 25 & 30 Yr Fixed
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