VA Construction Loan: What You Should Know

VA Construction Loan What You Should Know

VA Construction Loan: What You Should Know

A VA Home Loan for qualifying service members, veterans, and qualifying surviving spouses who want to purchase, refinance, or need a VA loan to build a house. Many people aren’t aware that you can apply to build a home from the ground up using a as a VA Construction Loan.

AVA Construction Loan is considered by many lenders  a higher risk investment, so it is important to shop around for a participating VAender to find the best option for you.

Financing for the VA Construction Loan

Your VA loan to build a house must be approved before construction may begin when using  VA Construction Loans. Loan funds are kept in escrow during the construction phase of the project and disbursed to purchase materials, pay contractors, etc. At no time is the borrower permitted unrestricted access or use of these loan funds–they can only be used for approved payments on the construction project and other mortgage-related needs.


Here is some more advice regarding VA Construction Loans:

Looking over the VA Home Construction Loan’s minimum property requirements

The VA requires that minimum requirements are met during the construction of any home build by financing through a VA home mortgage. The home must meet minimum property standards for safety and livability. 

This is required to ensure builders are following all local regulations for building codes and that the property complies with all federal regulations, which include regulations for HUD. This can includ inspections, compliance inspections, and other measures that may be required by state government, federal law, or lender standards.per VA regulations, to make sure all property requirement minimums, along with additional criteria, are being met and respected.Why are these standards in place?

The VA states that all minimum property requirements are in place to shield the borrower and ensure the home is safe and the VA home builder is following proper construction standards. It also ensures your home’s condition and value will be comparable to other houses in the area.

Exploring Specially Adaptive Housing with your loan

In addition to using your VA Construction Loan as a VA Home Loan to build a house, you may also qualify for VA Specially Adaptive Housing (SAH) grants. If you’d like to learn more about this possibility, local VA Loan Center.


Talk with one of the qualified VA Loan and VA Construction Loan lenders in our network to begin your journey to use a VA loan to build a house today. Remember, VA construction loans loans are not funded by the VA but by private lenders. It is always advised to get multiple quotes from both VA lenders and VA home builders to ensure you get the most competitiveinterest rates, the best terms, and the right builder for your needs.

  • Allen B Mitchell
    Posted at 16:45h, 06 January Reply

    good question Bill. i am wanted to know that as well..

  • 30sqm New Builds
    Posted at 09:14h, 31 December Reply

    These are some great idea about the concept in the detail that you have discussed here. I really loved it and thank you very much for sharing this with us. You have a great visualization and you have really presented this content in a really good manner.

  • Block Foundations
    Posted at 09:57h, 18 September Reply

    This is a brilliant post on VA construction loan what you should know. Thank you for sharing these great tips. I am sure many people will come to read this in future. This is a great post; I will share as much as I can.

  • Jess Harvey
    Posted at 01:40h, 21 December Reply

    I am a 100% disabled retired veteran who has relocated his family to a Battle Mountain, NV. It’s rural and 4 hours from anywhere, really. Do you know of any VA approved builders who are able to build here? I wouldn’t even know where to start looking. Thank you.

  • Gayl Hann
    Posted at 05:06h, 15 November Reply

    I’m writing from Montana. From what I understand 50 of our 56 counties in the state do NOT have building permits issued. Are building permits required?

    • Robert Simpson
      Posted at 11:19h, 06 May Reply

      I believe they do for an V.A. loan.

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    Posted at 21:43h, 06 November Reply

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  • Todd
    Posted at 14:43h, 11 September Reply

    The big issue everyone needs to be aware of is income. I am currently trying to build a home, however every financial institution that I have spoken with about a VA construction loan has told me the same thing. Under VA guidelines since I haven’t been on the job for over two years none of my overtime is allowed towards my income. The situation is that I just recently completed my Voc Rehab, and just got back to work. Under these rules I have to wait even longer before I can begin the process of building. The other issue is that I have run across is that some financial organizations offer VA loans, however they don’t offer construction loans. Personally if an organization deals with VA loans, then they should be required to deal with all aspects of those loans, and further more if a financial organization is subject to FDIC, then they should also be required to deal with VA loans.

  • Terell Brown
    Posted at 19:34h, 30 July Reply

    Great article introducing the VA Construction Loan. There are differences between a conventional construction loan vs a true VA Construction Loan which affords immense benefits to eligible Veteran borrowers. I talk about the differences in my article which can be found here:

    And to Bill’s earlier question, you will need to perform the necessary due diligence to ensure that you can build what you want, where you want it. What does it take to get a building permit in your area? You will need house plans, HVAC, etc. What are the home sales in your area? You will need to know this to ensure you do not over build. A real estate development manager like myself assist people in your situation to safeguard you from the very real risks that you are concerned about.

  • Tommy Evans
    Posted at 13:25h, 03 June Reply

    Hi Bill,

    What state are you in? I’ll be happy to get you connected with the right person to answer your questions.



  • Bill
    Posted at 21:26h, 16 May Reply

    I am a retired Navy Veteran and am wanting to build a home. I recently purchased 5 acres and I am currently in work with a builder working on blue prints. My plan was to get a construction loan through my current bank and then change it over to a VA load once construction is complete. My first question would be is there anything I should be aware of concerning any additional building requirements that the VA has. I have spoke with other veterans and they mentioned things such as distance from house to water well or septic tank. My second question would be what do I need to be doing to prepare for the VA loan. My biggest fear is I am missing something and will delay the building process or be denied the VA loan after construction.

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