Building Your Dream Home with the VA One-Time Close Construction Loan

Own a Home Built Just for You—With No Down Payment

Ever dreamed of building your perfect home, but thought it was out of reach? The VA One-Time Close (OTC) Construction Loan makes it possible!

This powerful loan program allows eligible veterans and active-duty service members to finance the construction, lot purchase, and permanent mortgage—all in one streamlined process.

While this loan is a fantastic opportunity, it does require more time, assets, and patience compared to a traditional home purchase.

The construction process typically takes 12 months or more, and I will be working closely with you through every step to ensure success.

?? Step-by-Step Guide to the VA One-Time Close Construction Loan

Here’s exactly how to turn your dream home into reality:

Step 1: Get Pre-Approved ?

Before designing your dream home, secure your financing. A VA-approved lender will review your credit, income, and eligibility for the VA OTC loan.

• Tip: Aim for a 620+ credit score to improve approval chances.
• More Assets Required: Unlike a traditional VA home purchase, lenders typically require reserves to ensure financial stability during construction. Expect to show at least 6 months of mortgage payments in savings.
• Gather These Documents: DD214 (if a veteran), Certificate of Eligibility (COE), recent pay stubs, tax returns, proof of assets, and bank statements.

Step 2: Find a VA-Approved Builder ???

Not all builders qualify for VA loans. Ensure your builder is VA-approved and familiar with the program.

• Ask for references and check their previous VA loan projects.
• Review their timeline and budget for completion.
• Work with your lender to ensure the builder meets all VA and lender requirements.

Step 3: Select Your Land ??

Already own land? Great! If not, the loan can include land purchase costs.

• Land must be in a residential zone and meet VA property standards.
• The lender will review land appraisal and title history.
• If the land is already owned, its value may count toward your equity in the project.

Step 4: Get Your Construction Plan Approved ??

Once your builder and land are secured, submit your construction plans for VA and lender approval.

• Plans must meet VA’s Minimum Property Requirements (MPRs).
• The lender will order an initial appraisal based on your plans.
• Some builders may require additional documentation, such as insurance coverage and licensing verification.

Step 5: Close on Your Loan ??

Unlike traditional construction loans, the VA OTC loan closes upfront. This means:

• The loan covers construction costs, land purchase, and permanent mortgage.
• No monthly mortgage payments are required during the build. Instead, an administration fee is included to cover interest and payments during construction.
• You won’t need to worry about payments until the home is fully built and converted into your permanent mortgage.
• Closing costs and any required reserves must be paid upfront.

Step 6: Construction Begins! ??

Your builder will start construction, with funds released in draws (stages) as work progresses.

• The lender will conduct inspections at each stage to ensure quality and compliance.
• Any construction delays or issues will require communication between you, your lender, and your builder.
• This phase requires patience and coordination, as unexpected delays are common in new construction.

Step 7: Move Into Your New Home! ??

Once construction is complete:

• A final VA appraisal confirms the home meets all requirements.
• The loan automatically converts into a fixed-rate VA mortgage (no extra closing costs!).
• You move in and start enjoying your brand-new home.

?? Important Considerations

• This process is more complex and takes longer than buying a move-in-ready home.
• Expect to work closely with your lender throughout the year-long process to ensure everything stays on track.
• Having extra savings will help cover unexpected costs or delays.
• Choosing the right builder is critical—experience with VA loans will make the process smoother.

?? Why Choose the VA One-Time Close Loan?

? No Down Payment – Keep your savings!

? One-Time Closing – No need for multiple loans.

? No Monthly PMI – Lower monthly payments.

? Locked Interest Rate – No surprises down the road.

? No Monthly Payments During Construction – Admin fee covers interest and costs.

Download My VA OTC Loan Guide for More Details ??

I’ve put together a detailed guide walking you through each step of the process. Go to my Featured section on Linkedin for your FREE copy!

This is a long-term process, but I will be with you every step of the way. Let’s make your dream home a reality! ??