Can You Get a Construction Loan With a VA Loan?

Yes, you can get a construction loan with a VA loan. On top of that, our construction loan will match a no money down VA loan. Furthermore since VA loan limits go away on January 1, 2020, it is possible for no money down construction loans that are over the conforming loan limits! Most VA eligible borrowers looking to build a new home realize it is hard to find a construction loan that will not require a down payment. Thus, it limits a Veteran’s ability to build a new home with no money down. But, we are going to show you how to get a VA construction loan in NC, SC, VA, and MD.

can you get a construction loan with a va loan
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Common Issues on Construction Loan With a VA Loan

The two most popular phrases we hear from Veterans looking for VA construction perm loans are…

  • I was told VA does not do construction loans
  • I can get a VA permanent loan but the construction loan requires a down payment

Regretfully, these are issues. The first line is true in that VA itself does not provide construction loans. But, lenders do. So, it is up to the lender or bank to provide the construction loan that converts into the permanent VA loan. Furthermore, most construction loans require a down payment. Often, a sizable down payment. Recently, we closed a no money down $500,000 construction loan in Fayetteville NC where the prior lender required over $60,000 just at the construction closing.

There is a reason most banks require a down payment and it’s because construction loans are risky. The buyer’s scenario could drastically change in 6 – 12 months during construction. Even the builder could come on hard times and stop construction. Although, we have a good history of allowing 100% financing on VA home loans along with the matching construction loan for Veterans that qualify.

Can I Use a VA Loan to Buy Land and Build a House?

Absolutely! For borrowers that qualify and homes that appraise sufficiently, it is possible to buy land and build with no down payment. That’s right! When a buyer qualifies for a no money down VA home loan with us, we will match the VA approval with a no down payment construction loan. Now, there are closing costs on the construction and VA loans which need to be paid. Although, solutions include builder paid costs or the property appraising for more than the land and build cost. Basically, we will lend a total up to the as completed value as determined by the VA appraisal. If the appraisal is higher than the land and home price, we can include costs in the loan up to the value.

How Do I Get a VA Construction Loan?

Many wonder “How do I get a VA construction loan?”. To most, it seems like it is impossible and it doesn’t help that many state it doesn’t exist. But, if you are looking to build in North Carolina, South Carolina, Virginia, or Maryland, we would love to help you. Generally, the following are key steps in how to get a no money down construction loan.

  • Get pre approved for a VA loan – Call or apply online
  • Find your land to build on – Acreage is ok with VA loans!
  • Choose your home plan
  • Get a price to build your home from a builder
  • Get your builder approved with us
  • Provide us with all required documentation

Have Questions About Building a Home? Contact Us!

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Written By: Russell Smith