October 29, 2024
First of all, the Department of Veterans Affairs does not allow VA lenders to offer standalone land loans utilizing a Veteran’s home loan eligibility. However, you can use the VA-insured loan program to buy land if it’s combined with the construction costs of building a new home. This loan product, known as a VA One-Time Close construction to permanent loan, allows borrowers to roll all the costs into one loan, requires $0 down payment for fully eligible Veterans, and involves just one closing. It’s a popular choice for those building Stick-Builds, modular, and manufactured homes. If you’ve dreamed of building your own home with a licensed general contractor (it cannot be yourself), the VA One-Time Close construction loan is the perfect option to make it happen—all with a $0 down payment!
Here’s why the VA One-Time Close loan is the top choice for veterans:
- No Payments During Construction: Free up cash flow while your home is being built.
- No Re-qualification Required After Construction: Enjoy peace of mind and avoid the hassle of qualifying twice.
- Flexible Credit Requirements: Borrowers with credit scores as low as 620 are eligible, broadening access to this exciting program.
- Options After Completion: Once your home is built, you have the choice to lock in your interest rate or modify it for a potentially lower rate.
Specialized Lenders for VA Construction Loans
While many VA lenders primarily offer home purchase and refinance loans, a few specialists across the country are well-versed in VA construction financing. Choosing a lender experienced in VA One-Time Close loans ensures a smoother process with expert guidance at every stage.
Important Considerations
The VA provides comprehensive guidelines for these loans, but lenders may apply additional requirements. For instance, while VA allows financing for single-family homes as well as two- to four-unit properties, lenders often require owner-occupancy and may have higher credit score minimums.
Want More Information About One-Time Close Loans?
One-Time Close Loans are available for FHA, VA and USDA Mortgages. These loans also go by the following names: 1 X Close, Single-Close Loan or OTC Loan. This type of loan allows for you to finance the purchase of the land along with the construction of the home. You can also use land that you own free and clear or has an existing mortgage.
We have done extensive research on the FHA (Federal Housing Administration), the VA (Department of Veterans Affairs) and the USDA (United States Department of Agriculture) One-Time Close Construction loan programs. We have spoken directly to licensed lenders that originate these residential loan types in most states and each company has supplied us the guidelines for their products. We can connect you with mortgage loan officers who work for lenders that know the product well and have consistently provided quality service. If you are interested in being contacted by (one) licensed construction lender in your area, please send responses to the questions below. All information is treated confidentially.
OneTimeClose.com provides information and connects consumers to qualified One-Time Close lenders in an effort to raise awareness about this loan product and to help consumers receive higher quality service. We are not paid for endorsing or recommending the lenders or loan originators and do not otherwise benefit from doing so. Consumers should shop for mortgage services and compare their options before agreeing to proceed.
Please note that investor guidelines for the FHA, VA and USDA One-Time Close Construction Program only allow for single family dwellings (1 unit) – and NOT for multi-family units (no duplexes, triplexes or fourplexes). You CANNOT act as your own general contractor (Builder) / not available in all States.
In addition, this is a partial list of the following homes/building styles that are not allowed under these programs: Kit Homes, Barndominiums, Log Cabin or Bamboo Homes, Shipping Container Homes, Dome Homes, Bermed Earth-Sheltered Homes, Stilt Homes, Solar (only) or Wind Powered (only) Homes, Tiny Homes, Carriage Houses, Accessory Dwelling Units and A-Framed Homes.
Your email to info@onetimeclose.com authorizes Onetimeclose.com to share your personal information with (one) mortgage construction lender licensed in your area to contact you. Your credit report will NOT be pulled due to sending this and we do not ask for Social Security numbers.
- Send your first and last name, e-mail address, and contact telephone number.
- Tell us the city and state of the proposed property.
- Tell us your and/or the Co-borrower’s credit profile: Excellent – (680+), Good – (640-679), Fair – (620-639) or Poor- (Below 620). 620 is the minimum qualifying credit score for this product.
- Are you or your spouse (Co-borrower) eligible veterans? If either of you are eligible veteran’s, down payments as low as $0 may be available up to the maximum amount your debt-to-income ratio VA will allow – there are no maximum loan amounts as per VA guidelines. Most lenders will go up to $1,500,000 and review higher loan amounts on a case by case basis. If not an eligible veteran, the FHA down payment is 3.5% up to the maximum FHA lending limit for your county.
Or you can go to this site and Request Additional Information.
Bruce Reichstein has spent over three decades as an experienced FHA and VA home loan mortgage banker and underwriter where he was responsible for funding “Billions” in government backed mortgage loans. He is the Managing Editor for FHANewsblog.com where he educates homeowners on the specific guidelines for obtaining FHA guaranteed home loans.
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