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.

Click here for loan Limits 

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).