Many veterans do not realize their VA benefit extends beyond buying existing homes — you can also use it to build a brand-new home from the ground up. The VA construction-to-permanent loan (also called a one-time close construction loan) allows you to build with zero down payment. Here is how it works. Contact MaxVALoan to discuss your new build options.
What It Means
A VA construction loan is a one-time close loan that covers both the construction phase and the permanent mortgage. You apply once, close once, and the loan automatically converts from a construction loan to a VA mortgage when your home is complete. This eliminates the risk of not qualifying for the permanent loan after construction — and saves you two sets of closing costs.
Requirements
- Eligible veteran or active duty service member with VA entitlement
- VA-approved builder: Your contractor must be registered with the VA
- VA construction appraisal: The VA appraises the home based on plans and specs
- Builder's insurance and licenses must be current
- The home must meet VA Minimum Property Requirements (MPRs)
- Standard credit and income requirements apply. See our credit score guide
- Occupancy within 60 days of completion. See occupancy requirements for military exceptions
Examples
Example: A veteran purchases a lot for $60,000. Construction costs are $340,000. Total loan: $400,000. He closes once on the combined loan with zero down. During the 8-month build, he pays interest-only on the drawn amount. When construction completes, the loan becomes a standard 30-year VA mortgage at his locked rate.
Tips
- Find a VA-registered builder early — not all builders work with VA construction loans. Ask your MaxVALoan advisor for a referral list.
- Lock your rate at the start if the market is rising — VA one-time close lets you lock before construction begins.
- Budget for contingencies. Construction costs often run 5–10% over the original estimate.
- Use our VA payment calculators to estimate your permanent mortgage payment before you commit to a build price.
Frequently Asked Questions
Q: Can I buy the land separately and then use a VA construction loan?
A: Yes — land you already own can be factored into the construction loan, potentially offsetting the construction cost.
Q: What if my builder is not VA-registered?
A: They need to be registered before the loan can close. Many builders will register when asked — it is not a complicated process for them.
Q: How long does a VA construction loan take?
A: The loan closing typically takes 45–60 days. Construction timeline varies by builder — typically 6–12 months.
