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Did you know that the VA offers a One-Time Close construction loan similar to the FHA One-Time Close loan? The VA version of the One Time Close loan allows qualified borrowers to finance both the construction and the permanent mortgage at the same time.

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VA One-Time Close Construction Loans

April 26, 2018 - In April 2018, the Department of Veterans Affairs revised and expanded a section of the VA Lenders’ Handbook to include additional guidance for VA construction loans.

Did you know that the VA offers a One-Time Close construction loan similar to the FHA One-Time Close loan? The VA version of the One Time Close loan allows qualified borrowers to finance both the construction and the permanent loan for the home itself (the mortgage) at the same time.

With a VA One-Time Close construction loan, the borrower does not have to worry about qualifying for two home loans, two closing dates, etc. The VA loan program also includes such “two close” construction loans, but the One-Time Close version of this loan has definite advantages.

The section of VA loan rules addressing One-Time Close regulations explains, “The permanent financing is established prior to construction, and the final terms are modified to the permanent terms at the conclusion of construction....Two-time close loans generally involve an initial loan

closing prior to the commencement of construction, and a second closing where permanent financing is used to take out, or replace the initial loan.”

Borrowers should know that while VA loan rules technically permit the borrower to act as her own builder, lender standards will apply.

Some lenders may not allow the borrower to work as a contractor on the project, while others may require extensive documentation (receipts, work orders, written agreements, etc.) from the borrower to account for how loan funds are spent during the construction phase. You will need to discuss what’s possible with a loan officer.

VA One-Time Close loans, like most other VA home loan products, require the borrower to occupy the home once finished. The home must be used as the borrower’s primary residence, though provisions are made for those called to active duty service, deployments, and other types of military duty.

Learn More About FHA One-Time Close Construction Loans

We have done extensive research on FHA and VA One-Time Close mortgages 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 onetimeclose@fha.com authorizes FHA.com to share your personal information with a licensed mortgage lender in your area to contact you.

Please note that the One-Time 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?

5. 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

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