Forgotten Your Password?

Need to Register?

Question Icon

Im not sure I fully understand my obligations as a borrower for a va new construction loan,is a 20% down payment required on my pa

by jeffrey.sizemore218 from , West Virginia. May 27th 2016 Reply


William J Acres (William_Acres)
#2 ranked lender in Arizona - 7,924 contributions

Yes. and No.. VA does allow for a construction loan and VA does do 100% financing, but understand that VA does not lend money.. they only insure loans against default.. The lenders, or those with the $$$, will oftentimes have their own rules above what VA calls for.. it's these "Overlay's" that makes lending different, one lender to another.. This all being said, Finding a lender to do a VA construction loan is near impossible.. not impossible, but near.. I can only assume, but it sounds like your lender does not do VA construction loans, so they are asking you to put 20% down, and then once the property is finished, you apply for a VA loan to pay off the construction loan.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com NMLS# 226347

May 27th 2016
0
0

Thanks for your time and even though I have yet to approach a lender I wanted to be a little more knowledgeable than I am. Your comments will go a long way in preventing me from wasting time with others that will only appear to be able to help. I assume it's as simple as do you offer va construction loans with no money down or don't you although I have been reading of a few other options and I think that may be what you were referring to as far as getting the VA after the project is completed which is not going to help if I need 20% to get to that point. Once again your input was appreciated.

May 27th 2016
0
0
Brandon Brady (BrandonBrady)
#66 ranked lender in Utah - 14 contributions

William's aswer is spot on. However, if you are using a builder and they carry the construction loan, you can use a VA loan for the permanent financing and still go to 100%. The builder will typically require a deposit which varies from builder to builder. You can get your deposit back when you close on your permanent VA loan, which is what most of my clients do. This may not fit what your looking for if you are building the home yourself, but something to look at if not. Best of luck to you!Brandon BradyChristian Roberts Mortgage

May 27th 2016
0
0
Lorne Harvey (lorneharvey)
#81 ranked lender in Washington - 418 contributions

From my experience, I do not know of any lenders who do VA Construction Loans, however if you can find a builder to build you a home, you can pay him off in full with a 100% financing VA loan. This is typically where you would be under contract to buy it from the builder, with a typical purchase and sale agreement. Hope this helps

May 27th 2016
0
0

Thanks all for pointing me in the right direction

May 28th 2016
0
0
Subscribe to our news feed.