December 16, 2019

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VA One-Time Close Construction Loan Tips

VA One Time Close Construction Loan Tips

There are plenty of VA One-Time Close (VA OTC) / Single-Close construction loan tips you should know about-probably as many as for FHA One-Time Close loan or the USDA One-Time Close equivalent. Did you know that the size of your project could affect your ability to get a no-money-down VA home loan?

Or that you should discuss the amount of time your VA OTC loan might take with the seller of the land if you are purchasing land and building the home? Know these issues before you apply for best results when you are ready to commit to your VA construction loan.

VA One-Time Close Construction Loans / Single-Close Construction Loans Require A Contractor

VA loan rules for construction loans require the borrower to hire an outside contractor rather than trying to do the work personally. The contractor may be required to meet VA requirements, and the builder and borrower will have to work together to submit plans and specs for the construction project.

VA One-Time Close Mortgages / Single-Close Mortgages May Require Extra Processing Time

Building a home from scratch with a VA OTC or VA One-Time Close loan is more complex than purchasing an existing construction home; borrowers should anticipate up to 60 days for processing.

VA One-Time Construction Loans / Single-Close Loans And The VA Loan Funding Fee

The VA loan funding fee is required for all VA loan transactions. But certain borrowers are exempt from paying this fee-if you are receiving or are qualified to receive VA compensation for service connected medical issues, you may be exempt from paying the funding fee if your records show this compensation or ability to be compensated.

Those who have not received an official determination from the Department of Veterans Affairs for disability purposes may be required to pay the funding fee, and apply for a refund once the VA disability rating is updated in the applicant’s service records.

VA Advice For Buying Land And Planning Your Construction Loan Project

The Department of Veterans Affairs official site advises qualified VA borrowers, “Don’t build on land that is larger than what would be considered ‘standard and customary’ for the area. The appraiser may feel that some of the land is excessive…” and a VA borrower may, in such cases, “find that the appraisal falls short of what is needed.

Learn More About VA, FHA, Or USDA One-Time Close / Single-Close Construction Loans Today

We have done extensive research on FHA, VA and USDA One-Time Close / Single-Close mortgage loans and spoke directly to the licensed lenders for most states. These are qualified mortgage loan officers who work for lenders that know the product well.

Each company has supplied us the guidelines for their product. If you are interested in being contacted by one licensed lender in your area, please respond to the below questions to save time. All information is treated confidentially.

Your response to authorizes us to share your personal information with a licensed mortgage lender in your area to contact you.

Please note that the One-Time Close / Single-Close Construction Program only allows for single family dwellings (1 unit) – and NOT for multifamily units (no duplexes, triplexes or fourplexes).

1. Send your first and last name, e-mail address, and contact telephone number.

2. Tell us the city and state of the proposed property.

3. Tell us your credit score and/or the Co-borrower’s credit score, if known. 620 is the minimum qualifying credit score for this product.

4. Are you or your spouse (Co-borrower) eligible veterans?  If either of you are eligible veteran’s, the down payment is $0 up to the maximum VA lending limit for your county. If not, the FHA down payment is 3.5% up to the maximum FHA lending limit for your county.

Bruce Reichstein - Staff Writer

By Bruce Reichstein

July 15, 2019

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 where he educates homeowners on the specific guidelines for obtaining FHA guaranteed home loans.

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About was launched in 2010 by seasoned mortgage professionals wanting to educate homebuyers about the guidelines for FHA insured mortgage loans. Popular FHA topics include credit requirements, FHA loan limits, mortgage insurance premiums, closing costs and many more. The authors have written thousands of blogs specific to FHA mortgages and the site has substantially increased readership over the years and has become known for its “FHA News and Views”.

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