These loans are funded by the Department of Veterans Affairs (VA) and are available to any qualified veteran or active duty service member.
The advantages of VA Construction and Permanent Loans include no down payment, no private mortgage insurance, competitive interest rates, and an array of fixed and adjustable rate options. Borrowers can also benefit from lower closing costs as well as flexible repayment terms. Additionally, the VA Construction and Permanent Loan program can help borrowers finance the purchase of new homes as well as provide funds for renovations and building improvements.
VA Construction and Permanent Loans are available in a variety of types including hybrid adjustable-rate mortgages, fixed-rate mortgages, interest-only mortgages, and others. No matter what type of loan a borrower is interested in, the application process begins the same way - with a Certificate of Eligibility (COE). This form is required by the VA and can be obtained through lenders, the VA website, or directly from the VA.
The next step of the VA Construction and Permanent Loan process is a loan preapproval. During this step, lenders review the required documents including the Certificate of Eligibility, credit reports, income verification, and property appraisal reports. Borrowers must also provide a contract with a builder if they’re building a home, or a signed purchase agreement if they’re purchasing a new home. The lender then issues a preapproval letter which includes the terms and conditions of the loan.
After the loan is preapproved, the lender will submit the loan to the VA for final approval. Once approved, the loan can move to the closing stage. To close the loan, a borrower must sign all documents and provide the down payment and closing costs. After the loan is closed, the construction or renovation projects begin.
To summarize, VA Construction and Permanent loans are a great way for veterans to finance the purchase or construction of a new home. These loans are backed by the government and have a number of benefits including no down payment, competitive rates, and low closing costs. The process involves obtaining a Certificate of Eligibility, getting preapproved for the loan, and signing documents at the closing table. With a VA Construction and Permanent Loan, veterans can easily fund their dream home.
This article was contributed on Nov 11, 2023
