The “VA” One-Time-Close Loan
The VA’s One-Time Close loan is a 30-year, fully amortizing mortgage. Credit guidelines are set by the lender, but eligible borrowers typically must have a minimum FICO score of 620.
Like all VA Home Loans, there is no down payment requirement. Additionally, the VA limits the amount of fees the lender can charge, and even those can be paid via interested party contributions (sometimes referred to as a seller concessions, although commonly paid by the builder in the case of a construction-to-permanent loan).
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"Starting in 2020, loan limits no longer apply to new VA Loans. Even though the VA can now back larger loans, your lender will insist that you meet their own credit requirements."
What is a VA Loan?
The Department of Veterans Affairs (VA) aims to provide America’s veterans and their beneficiaries with world-class benefits and services that they have earned. One of the benefits available comes in the form of affordable VA Home Loans which are available to service members, veterans, and eligible surviving spouses.
VA Home Loans also include the One-Time Close Construction-to-Permanent loans. All loans are provided by private lenders, but the VA guarantees a portion of the loan, making it possible for lenders to offer more favorable terms.
What Can You Build With a VA Single Close Loan?
Any home built and purchased with a VA One-Time Close loan must serve as the borrower’s primary residence. The Single Close loan can be used to construct new manufactured homes (excluding single wide homes), modular homes, and site-built homes, all of which must be one-unit homes.
Who Can Apply?
Veterans, active duty service members, National Guard members, and reservists must meet the basic service requirements set forth by the Department of Veterans Affairs to be considered eligible for a VA Home Loan. Spouses of military members who died while on active duty or as a result of a service-connected disability may also be eligible.
You may be eligible for a VA Home Loan if you meet one of more of the following conditions:
- You have served 90 consecutive days of active service during wartime.
- You have served 181 days of active service during peacetime.
- You have more than 6 years of service in the National Guard or Reserves.
You are the spouse of a service member who has died in the line of duty or as a result of a service related disability.
It is ultimately up to the VA to determine who is and isn’t eligible for a home loan. If you’re a veteran curious about the possibility of having your new home built from scratch, talk to a lender about your options.
