If you are a veteran of U.S. Armed forces, who want to construct a home, you likely are aware of the Veterans Administration construction loans. These loans help in minimizing the costs of constrictions to make your dream of constructing a reality.

V.A. home loan is a mortgage and refinancing solution for veterans, service members, and eligible surviving spouse to get the homeownership. Though the private lenders offer the mortgage, the loan is backed by the government personals of Department of Veterans Affairs. Also, borrowers can use the amount for buying a residential property, not for financing.

Furthermore, V.A. construction loan offer benefits like lower loan rates as compared to traditional financing, the possibility of financing without giving any down payment, locked-in interest rates, and more.

Are you qualified for the V.A. loan:

One of the most important steps in getting approved for VA construction loan is ensuring that you qualify eligibility criteria. Although the requirements of V.A. home loans and the V.A. construction loan is the same, the only thing that differentiates them is the way lenders disburse the funds that are required.

However, to qualify for these loans, these requirements must be fulfilled:

  • You should have a COE, certificate of eligibility from the authority as a proof to show that eligible for the loan. The certificate will show that you are an eligible spouse of veterans, have severed military for a good amount of time.
  • your debt-to-income is 41% or below
  • You have a minimum credit score range between 620-640, depending on the lender ( some lender might have low requirements)

Other general eligibility requirements for V.A. home loans:

  • You have completed active service of 90 consecutive days during war days
  • Have served for 181 days during peacetime
  • You have been a member of the National Guard or Reserves for at least six years or more
  • You are married to a U.S. service member who gets service-related disability or died in the line of duty

Few things you need to keep in mind for applying for a V.A. construction loan:

Finding The Lender: Once you know that you are eligible for this loan, the first thing you need to do is to find an experienced loan company.

Get Pre Approved: To preapproved for the loan, submit your name, previous bank statements, name and address, previous tax returns, and other documents of debts and liabilities. You might need to show proof of income and employment.

Finding A Builder:  Since you are constructing a new home, you need to choose a builder and a floor plan. And your selection of builder depends on your maximum loan amount. So, look for a licensed and insured builder who will work within the budget and will help you through the construction loan process.

Stay Prepared For Extra Paperwork: Make sure that you and your builder should work together to submit everything. From plans to blueprints related to home mortgages to other paperwork, get everything ready and handy. Since VA construction loan might take at least 45-60 days,  which is longer than the traditional process,  you need to be ready with everything beforehand.

Underwriting: It’s a process when all the parties are agreed on one thing that will explain how the lender will disburse the funds to the builder and other things.

Closing The  Process: After the completion of underwriting, homebuyers and builders should prepare for the closing. With VA loans, the buyers can easily conduct the one-time close.

Pros And Cons Of Using A V.A. Construction Loan:


  • You can build the home by using only one closing
  • You are safe from making any down payments
  • Low-interest rates
  • No need for private mortgage insurance


  • It’s a slow process
  • V.A. loan lenders are hard to find
  • The construction process can be stressful
  • You might need to pay the funding fee

Of course, V.A. home loans are not readily available, but if you can find the lender, these loans can benefit you!

By rawat

Leave a Reply