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 FHA, VA and USDA One-Time Construction Close to Permanent / Single-Close Construction Loans
One-Time Close Loans are available with VA, FHA and USDA Mortgages. We have relationships with several large Mortgage Banking firms who specialize in these loans which also go by the following names: 1 X Close, Single-Close Loan or OTC Loan.
Our extensive research on these programs and their guidelines allow us to educate potential home buyers who want to explore purchasing a newly constructed home versus purchasing a resale home while utilizing the same down payments for each product type.
We are constantly updated on these programs and have extensive knowledge on VA (Department of Veterans Affairs), FHA (Federal Housing Administration) and USDA (United States Department of Agriculture) One-Time Close Construction programs.
We speak directly to the licensed lenders that originate these residential loan types in most states. They 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.
Please note that investor guidelines for the FHA, VA and USDA One-Time Close Construction Program only allows for single family dwellings (1 unit) – and NOT for multifamily units (no duplexes, triplexes or fourplexes). Home types include: Site-Built, Modular or Manufactured Homes.
In addition, the following are “NOT” allowed under these programs:
Kit Homes – Steel Framing Kits, Barndominiums, Log Cabin Homes, Shipping Container Homes, Stilt Homes, Solar or Wind Powered Homes.
Your response to email@example.com authorizes us to share your personal information with a licensed mortgage lender that is familiar with your area to contact you.
- Send your first and last name, e-mail address, and good contact number.
- Tell us the city and state of the proposed property.
- 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.
- Are you or your spouse (Co-borrower) eligible veterans? If either of you are eligible veterans, the down payment is $0 up to the maximum amount that the debt ratio will allow – there are no maximum loan amounts as per the Department of VA. Most lenders will go up to $750,000. If not, the FHA down payment is 3.5% up to the maximum FHA Lending Limits for your county and the USDA down payment is $0 and based on maximum income.