Having a house built is an excellent way to obtain your dream home. Building your own home could also be a solution in areas where there is a low inventory market. While most construction projects can be complex, it’s a great benefit for those Veterans willing to invest the necessary time, energy and funds to ensure the project’s success. Just like a traditional VA home loan where the Veteran purchases a pre-existing or newly built property, there may be no down payment, no private mortgage insurance requirement, and depending on your VA disability rating, you may be exempt from the VA funding fee.
A construction loan is structured differently from a traditional mortgage, and it comes with stricter qualifications and greater documentation. One of the first steps is to find a participating VA lender who offers a construction loan product. Once you’ve chosen a lender, you’ll need to provide proof of income, reserves, assets and debts along with a complete credit check. There are numerous construction loan calculators that can help provide estimates, but it’s best to work with your lending professional to determine how much you can afford.
Having a home built to your specifications requires architectural plans and hiring the right contractor to do the work. Veterans should conduct a thorough search and utilize trusted sources when choosing a builder. A good place to start is your local home builders’ association that maintains a list of builders who construct homes in your area and meet state and/or local licensing requirements. Construction loans require a good amount of pre-planning and paying out of pocket expenses before purchasing the land. You’ll want to do proper due diligence with the local building authority to ensure all necessary permits can be obtained.
Once approved, construction can begin with initial proceeds disbursed into an escrow account. The money in this escrow “draw account” pays the builder at certain points during construction. Your lender must obtain your written approval before each disbursement or draw payment is provided to the builder. Choose your new home builder wisely. The best ones take charge and communicate well. Check references, read reviews and look at their past building projects. Don’t be afraid to ask questions and compare builders just the same as you’d do to choose a lender.
Today, most construction projects can take a year or more to complete. It’s important to understand factors that are outside your control and may potentially extend or delay the timeline of your construction project that can drive-up costs. Unforeseen circumstances like weather, lumber costs, labor shortages or plan changes can throw a construction project off track. Although the loan will normally be considered guaranteed upon closing, the guaranty on a construction home loan will not be issued until a clear final compliance inspection report has been received by VA.
VA is always working hard to improve the well-being for our Nation’s Veterans, and VA home loans are a great opportunity for those wanting to build their “forever” home.
For more information about the specifics of the VA construction loan process and requirements, please see the VA Buyer’s Guide (PDF, 52 pages, 925KB).
Topics in this story
More Stories
VA will now publish the amount of money it's legally obligated to pay to VA-accredited attorneys and claim agents assisting Veterans with disability claims.
A new ruling limits the circumstances for apportionment of compensation, pension and DIC benefits, and will stop making need-based apportionments going forward.
The Servicemembers’ Group Life Insurance Traumatic Injury Protection (TSGLI) program is celebrating 20 years of providing short-term financial support to help eligible service members recover from traumatic injuries.
Can a ‘qualifying veteran’ purchase a 4-6 unit (6 total unit’s), ‘former rental property’, using their VA loan, with one or more of the units as their primary residence, and rent or sell the remaining units to family members or non-family members?
[Editor: Page 15 on this .pdf: https://www.benefits.va.gov/homeloans/documents/docs/VA_Buyers_Guide.pdf ]
Where, in the VA loan ‘handbook’, or any related VA home loan publications are ‘occupancy’ rules, (exceptions and enforcement of those rules, and regulations explained or discussed), other than the statement that a VA home loan requires the ‘veteran must occupy the property’?
I tried to do one near Atlanta in 2020 but no banks will participate.
I’ve called around to a number of banks and only found one that actually offers VA Construction Loans. (reAlpha Bank) The catch is, they add about 20% on top of the loan amount to cover:
Principal and interest while the house is under construction (since you don’t make payments until it’s finished)
A contingency fee in case prices change
Closing costs
Since this is the only bank I’ve come across that does VA Construction Loans, I’m not sure if that extra 20% is standard practice or just unique to them. And it takes ~ 120 days to complete the process. So plan ahead if you decide to go this route.
Would the Home Loan program cover upgrades and/or expansions to a current home?
That would be the VA Renovation or rehab loans.
I have yet to find a bank that will do this.
I am checking with my preferred lender (CMG Financial) if they process VA construction loans.
https://www.cmghomeloans.com/mysite/paula-white Paula has been working with Veterans and VA loan program for 20 years. Living and working in northern Virginia, Paula and CMG are my go-to whenever I have VA loan questions and when my clients need options.
Contacted, President Donald J. Trump, about making “ABANDONED” Homes available to those who have a “COE” (Certificate of Eligibility) whom are facing homelessness or whom are already homeless. I have created the process, just praying that it becomes an “EXECUTIVE ORDER”. Please keep me in your prayers. Thanking, President Trump, in advance. Thursday, September 4th, 2025. Quancidine Hinson-Gribble, SURVIVING SPOUSE, ADVOCATE.
Good deed will ?
I looked at the VA Home Buyers Guide but there are only 50 pages, not 52 and none of the pages address a construction loan, only a home loan (mortgage)
I just looked at the guide it is on page 17
I thought this section would recommend the vet actually construct his own house. Doesn’t get cheaper than that.
Good luck finding a lender that offers VA construction loans. I found 2 that service Michigan and 1 was a mtg company. I picked the other one “The Federal Savings Bank” and once we got the process completed to start building the house they removed VA construction loans from their website…
How about giving the veteran more money in their disability pensions? Most veterans don’t want a dream home just a place where we can exist and lessen the nightmare. You wonder why veterans are homeless? It’s because you don’t give them enough money to survive on. We were there when you needed us, so why aren’t you here when WE NEED YOU?
We’re due to close next week on our Construction to VA Loan . It’s definitely not been an easy road but it is possible. If you’re thinking of going this route, you are going to need to have some funds on hand as there will be up front out of pocket costs. To begin with, get a good realtor and find you some land. Next find a good architect and start working on drawing up plans what you’ll need in your home. This step will take longer than you think. Drawing up house plans will run you $2-3k so again, you need to have funds ready for this. Next , find a good Mortgage lender who offers this type of loan. (Construction to VA Loans ). One company I came across that works with most states : https://crosscountrymortgage.com/
I went with a local lender here in FL but hopefully this helps someone out there!
Next get pre-approved start your process. Be patient in this process, it does not move fast.. hope this helps! ?
Does the Va provide assistance to disabled veterans w/grants for roof replacement?
Good question. I need a food S as well.
cant log in please call me thank you bill LACERTE
How about a loan to extend a room already on my house
Bill.
You can contact a local community back and ask if they do construction loans. You may be able to get this done conventionally and not go VA at all if you have enough equity in your home.
You’re looking for a VA Renovation loan: VA renovation loans, often referred to as VA rehab loans, VA reno loans, VA supplemental loans or VA home improvement loans, offer Veterans and service members a low-cost, no-down-payment way to purchase fixer-uppers or homes in need of some extra TLC.
Through VA renovation loans, borrowers can finance both the purchase of a home and the completion of any necessary repairs or renovations. But it’s important to understand the limitations of this special loan option, including that it can be difficult to find lenders that make them.
[Editor: The three types of loans under the VA home loan program are the VA Purchase Loan, used to buy a home; the VA Cash-Out Refinance Loan, to get cash from home equity; and the Interest Rate Reduction Refinance Loan (IRRRL), to lower the interest rate on an existing VA loan. More info, here: https://www.benefits.va.gov/homeloans/ ]
I would love to share my idea with you, I am married to a Service-Connected Veteran and a Veteran Advocate and we would love to share our ideas with you. Thank you ??
What kind of ideas?
This is what VA does, but this all sounds sexy, until a Combat Veteran starts to search for a mortgage lender then it’s like searching needle in a haystack ?
I agree. I Thank God that my husband saw through the greediness of the Realtors. And started goin to open houses ourselves.
Can somebody give me a link to nccer’s website?
I need to know where to start out at
Of course it’s offered! But good luck finding a bank that actually does a true VA construction loan! We’ve been trying to find one for over 8 years.
Try: https://www.cmghomeloans.com/mysite/paula-white CMG Financial is my go-to in northern VA but the lender is nationwide.
Tried dealing with the V.A. to get a home what a nightmare!! Drove me nuts!! I have a heart condition did not need the stress talked to many fellow veterans some retired told me a nightmare!!
Total scam just like the complex injury groups, family caregiver programs and VA home loan to name a few. They make them so complex that it can’t be accomplished by the veteran. Kicked out of complex issues to group for lack of contact because they SEND MESSAGES TO YOUR CELL PROVIDER! They don’t call your phone to ring it so you didn’t pick up. You’re not alerted to messages being left without calling and ringing your phone and the VA knows it. Denied family care giver because I did the steps and during COVID so they say I don’t qualify because I ABLE TO COMPLETE THE STEPS so I can do things and don’t need my wife at home. But YES VA gets called out for this ABHORRENT BEHAVIOR and send a letter WITH MORE UN DO ABLE steps to get back into the IMPOSSIBLE SCREENING steps for the caregiver program. SURPRISE DENIED!!! CAN’T COMPLETE THE STEPS so you can’t qualify!!! AND COMPLETING THE STEPS ALSO MEANS YOU DON’T QUALIFY.
UNLESS YOU’RE A POSTER CHILD THAT THEY CAN USE TO SHOW HOW GREAT THEY ARE?!?!
You are wrong and many don’t qualify. Just because you are disable does not mean you automatically qualify for family caregiver. There are criteria that must be met and to be honest with you most people don’t meet them.
The problem I see is that the VA spends more money, time, and manpower on programs that don’t offer as much to the Veterans. Like it costing $5 to get $1 to the Veteran. That’s ridiculous. Especially when the VA does not make it a priority to hire Veterans. Most Admin jobs could be done by Disabled Vets, but the VA hires civilians instead.
Any suggestions on a lendor for a va construction loan?
That’s wonderful the only thing missing is where do you apply for this? Doesn’t mention anything about how difficult it is to obtain one. So much publicity for them all over the place I applied for one and got instantly disapproved. Rather than work with you and get you to where you need to be it was a disapproval and the mortgage company I went through just dropped me. Yet it’s what we deserve. Let’s see these articles actually follow a veteran and go through the process.
In the 2004 film ‘THE NOTEBOOK, Noah (Duke) returned from World War II and used his G.l. Bill to build/rebuild the dream-home he promised his sweetheart Allie… would that be similar (or same) to the ‘construction loan’ referenced in this article?
Hello – I did not notice this in the movie. This is a great question, and perhaps an alternative for those earned funds. I think you should pursue this as a possible option, or we should contact our Rep/Congressman to have things changed; and quickly. Many would choose the home option, as they may already have their education, or be at a point in life do not need to go back to school? IMO, should not be an issue, if so , why?
It is a deserved benefit for
veterans.
Is this construction loan available in the Philippines?
In the Philippines, one severely-disabled Veteran was recently approved for an SAH grant and the team coordinated with the home builder he selected. Throughout the construction process, they worked with the Veteran and his family to ensure the newly constructed house met all of his needs. After his new home was built, his family no longer had to carry him down two flights of stairs, and his quality of life greatly improved.
Learn more about housing assistance for disabled Veterans living overseas: https://news.va.gov/141018/vas-specially-adapted-housing-sah-program-helps-disabled-veterans
Hi Denver, great question! If you qualify for the Specially Adapted Housing (SAH) grant, you might be able to use it in the Philippines and may be eligible for up to $121,812 in grant funds (FY 2025). You may also be eligible for the Special Home Adaptation (SHA) grant for up to $24,405 which may be available to use in the Philippines.
To learn more, visit VA.gov/housing-assistance/disability-housing-grants/how-to-apply
How can I get a new home?
The first step is getting your Certificate of Eligibility (COE), to get started just visit Benefits.VA.gov/HomeLoans
With a construction loan like this, do repayments start right away or do they begin after the house is completed?
Try here https://nccer.org