Building Loans Made Easy
VA & FHA Construction Loans
FHA loans
are governed by the Single Family Housing Policy Handbook 4000.1
1. Key features include:
- Eligibility: Borrowers must meet standard FHA credit, income, and down payment requirements (typically 3.5% down with a 580+ credit score).
- Loan Structure: One-time close loan that converts to a permanent mortgage after construction.
- Builder Requirements:
- Must be licensed and insured.
- Must provide a one-year warranty on the home.
- Property Requirements:
- Must meet FHA minimum property standards.
- Appraisal is based on the completed value of the home.
- Inspections: FHA requires inspections at various construction stages.
- Loan Limits: Subject to FHA county loan limits.
🪖 VA Construction-to-Permanent Loans
VA loans are governed by the VA Guidelines
Key highlights:
- Eligibility: Available to eligible veterans, active-duty service members, and some surviving spouses.
- Loan Structure: One-time close loan that transitions to a VA-guaranteed mortgage.
- Down Payment: No down payment required in most cases.
- Builder Requirements:
- Builders no longer need a VA Builder ID as of 2025 3.
- Must meet local and state licensing requirements.
- Property Requirements:
- Must meet VA minimum property requirements.
- Appraisal is based on the completed home.
- Inspections: Required at various stages of construction.
- Funding Fee: Applies unless the borrower is exempt (e.g., due to disability).