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Will the VA lend on new construction of a second home?

by Jeffng_720_237 from Beaverton, Oregon. Mar 25th 2013 Reply


Benjamin Bote (Benjamin)
#797 ranked lender in California - 20 contributions

Primary residence only. You could convert your existing to a second home and purchase the new one as primary if you would move into the new home. That's the only way I know.You would also need to income qualify with both payments.

Mar 25th 2013
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Peter Savino (855411LEND)
#100 ranked lender in New Jersey - 332 contributions

No they will not,

Mar 25th 2013
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Jeffrey Hendrickson (jphendrickson)
#79 ranked lender in Washington - 1 contribution

If the new home will be your primary residence, then yes it can be done. You'll need to be able to afford both mortgages or have plans to sell the home you're now in before moving forward with the financing. I have been through the the process multiple times, both as a lender and as a veteran building my own home. Happy to help if you want to give me a call or shoot me an email. Regards.

Mar 25th 2013
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Dave Metsker (DaveMetsker)
#37 ranked lender in Oregon - 2,317 contributions

Not on second home.

Mar 25th 2013
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Bert Carpenter (BertCarpenter)
#38 ranked lender in Arizona - 1,815 contributions

People, people, people. VA and FHA are ONLY for the borrower's PRIMARY residence. The do not make new loans for a rental, vacation, second home, Kiddy Condo, or any other type of occupancy. You must move into it as your primary residence. Secondly, VA does not make ANY construction loans. If you want to build a home to live in and have a VA loan, you must first arrange for the construction financing and once the home is complete and you are ready to move in, VA will provide the permanent financing to pay off the Construction lender. ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ Licensed in California and Arizona ~ www.LoansA2z.com 888-889-9950

Mar 25th 2013
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Nevin Williams (NevinWilliams)
#42 ranked lender in North Carolina - 108 contributions

Hi Jeffng That is a great question! Sorry but Lender411 doesn't let me space this info into easy to read paragraphs........The VA will allow contruction financing........VA will guarantee a "construction/permanent home loan," that is, a loan to finance the construction/purchase of a residence. The loan is closed prior to the start of construction with proceeds disbursed to cover the cost of, or balance owed on, the land, and the balance into escrow. The escrowed monies are paid out to the builder during construction. The lender must obtain written approval from the borrower before each draw payment is provided to the builder...........Chapter 14 of VA guidelines whcih can be found at VA.gov also provide info on the construction phase........Unfortunately, the VA will guarantee a home that is not a primary residence. .............However FHA will under certain circumstances:............. Many people may not know that FHA financing is allowable for a secondary residence. However, certain criteria must be met in order to use FHA financing for the secondary residence............Contact me to see if FHA or other financing options may be available to you. Here are the requirements and they all must be met to be eligible:......o The secondary residence must not be a vacation home or be otherwise used primarily for recreational purposes...........o The borrower must obtain the secondary residence because of seasonal employment, employment relocation, or other circumstances not related to recreational use of the residence...........o There must be a demonstrated lack of affordable rental housing meeting the needs of the borrower in the area or within a reasonable commuting distance of the borrower's employment, and..............othe borrower must provide supporting documentation of the lack of affordable rental housing, including ................-a satisfactory explanation for the need of a secondary residence and the lack of available rental housing, and.............. -written evidence from local real estate professionals who verify a lack of acceptable housing in the area.............There are other loan programs available for secondary residences. Email or call today to learn more. (919) 863-4370

Mar 26th 2013
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Nevin Williams (NevinWilliams)
#42 ranked lender in North Carolina - 108 contributions

Oops typo in my previous reply.......Unfortunately, the VA will guarantee a home that is not a primary meant to say will "NOT" guarantee

Mar 26th 2013
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Andrew Alfonso (CashCow)
#44 ranked lender in Florida - 271 contributions

No but thank you - Andrew

Mar 26th 2013
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