VA Construction Loans: How to Build a Home with a VA Loan

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Choose a lender and get preapproved

If you are an active duty service member or a Veteran of the United States Armed Forces then you have likely have va loan eligibility. When you search on Google you’ll see many options for lenders, however some that might be on the first page don’t do VA construction loans. If you want to work with a lender that specializes in va one-time close construction loans then look no further than Security America Mortgage.

VA Construction Loans, What are the Benefits?

VA construction loans have many great benefits.

  • No mortgage insurance
  • No funding fee for disabled Veterans with more than 10% disability.
  • No down payment required
  • Competitive interest rates
  • Suitable for Veterans using their VA loan benefit for the first time.
  • Subsequent usage of the va loan is ok.
  • Protections in place for buyers such as non-allowable fees and financing contingencies.

How Long Does It Take To Close On A VA Construction Loan?

That’s a loaded question and depends on you, your lender, your builder, the county/city that you want to build. It can take 90 days or 1 year depending on the situation.

What’s the VA Construction Loan Process and how to prepare?

The process starts first with getting pre-approval from Security America Mortgage or another lender who specializes in construction loans. You’ll probably like the one-time close construction loan advantages most. In order to close on your construction loan:

  • You’ll need to have a Department of Veterans Affairs registered builder.
  • Your builder will need to be approved by your lender
  • Your plans will need to be approved by the lender but at least know the size and layout of your home, and the estimated cost of construction
  • You will need to own land, have it financed, or try to close on the land and construction at the same time.
  • The type of materials you plan to use

Can you buy land with a VA construction loan?

Yes, you can but make sure you have time to close on your land contract. If you are buying land and have it under contract with limited time then it’s going to be hard to have all the aspects in the va construction loan process covered.

Find a VA-approved home builder

You can find a VA-approved builder at https://securityamericamortgage.com/va-approved-builders/. These builders are registered with the Veterans Affairs and approved by Security America.

Can a Seller Contribution To Closing costs on a VA loan?

Here are some of the closing costs that a seller can contribute to:

  • VA funding fee
  • Origination fee
  • Title insurance
  • Escrow fees
  • Recording fees
  • Survey fees
  • Inspection fees
  • Pest inspection fees
  • Homeowners Insurance

It is essential to note that sellers are not required to make a seller contribution to closing costs. If the seller is willing to contribute, it can help to reduce the upfront costs of buying a home for the buyer.

Here are some tips for negotiating seller contributions to closing costs:

  • Do your research upfront. Before you start negotiating, it is important to understand the typical closing costs for a VA loan in your area. This will help you to determine a fair amount for the seller to contribute.
  • Be prepared to walk away. If the seller is not willing to contribute to closing costs, be prepared to walk away from the deal. There are plenty of other homes on the market, and you don’t want to get stuck with a high closing cost that you cannot afford.
  • Be flexible and always use a Military friendly Realtor. The seller may not be willing to contribute to all of your closing costs. Be willing to negotiate and compromise. For example, the seller may be willing to contribute to the VA funding fee, but not the origination fee.

If you are a veteran who is considering buying a home, be sure to talk to your mortgage lender about seller contributions to closing costs. This can help you to save money and make the home-buying process a little bit easier.

Do I need a certificate of eligibility (COE) for a construction loan?

Yes, you’ll always need a COE. Security America Mortgage has direct access to va.gov to pull an automated Certificate of eligibility for you if need be.

When do mortgage payments begin with a VA construction loan?

They will begin when the home is complete.

What kind of house can I build with a VA construction loan from Security America Mortgage?

  • Single-family homes
  • Multifamily homes
  • Manufactured homes
  • Modular homes
  • Custom homes

What’s the difference between a one-time close construction loan and a traditional construction loan?

A one-time close construction loan is a type of loan that allows you to finance the construction of your home in one step. In some cases, with some one-time close construction loans, you will receive the full amount of the loan at the beginning of construction, and you will make interest-only payments until the home is completed. Once the home is completed, you will then make monthly payments on the loan, just like a traditional mortgage. However, not all one time close construction loans are the same. Security America Mortgage has a one time close construction loan that has no payments due from the borrower during construction. And with SAM, the builder will decide if they want draws or no draws. Generally, no re-qualification is needed once the borrower is approved and no property value recertification is required for (FHA, VA, and USDA)

A traditional construction loan is a two-step process. In the first step, you will receive a loan to cover the cost of purchasing the land for your home. In the second step, once construction has started, you will receive additional loans to cover the cost of construction. Once construction is complete, you will then consolidate these loans into a single loan, which will be repaid over time, just like a traditional mortgage.

Choose a VA lender that not only knows the VA loan guidelines but also the VA Construction loan One-time Close guidelines

Security America Mortgage offers Up to 100% financing On Your VA Construction Loans and specializes in VA loans and the one-time close construction loan. They offer an Easy Application Process that’s more efficient and transparent. Serving those who served is their motto and you can reach them today at 1855GOVANOW.

 

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