A VA 0% down payment construction to permanent mortgage loan combines the features of a construction loan and a traditional long term 15 or 30 year fixed rate residential mortgage loan with a single loan closing prior to the start of construction.
This is a big advantage because most construction loans require two closings one for construction and then another one when the home has been completed, saving you time and money. One of the best things is that you don't pay any interest or mortgage payments during the construction of your new home. The mortgage and builder approval process takes 60 to 90 days from start to finish and we allow the builder up to 9 months to complete the construction.
If you already own the land and have equity built up we will give you credit for the equity so you can put little or no money down. Land can be presently owned, whether free & clear or with a mortgage or can be purchased simultaneously from the builder or even a third party.
We also offer VA Jumbo Construction Mortgage Loans up to $1,094,625, No Down Payment on the first $417,000 then you simply put 25% down payment over the amount over $417,000.
Our VA construction One-Time Closing Construction loan requires 2 approvals, one is the VA buyers loan and the second is the builder's construction funding approval. The buyer makes no payments during the construction process and the Builder is required to include certain construction loan fees listed below into their cost of building the home.
The company that provides the construction funding is NCF and here are their fee's. Construction Admin Fee is 2.25% of loan amount.
- Construction Underwriting Fee is $250.
- Construction Closing Coordination Fee is $275.
- Construction Inspection Fee is $750.
- Interim/Construction Interest Rate*: Currently at 8.00%
This is not the permanent interest rate of the borrower’s loan, it is the interim interest rate accruing on disbursed construction funds only. These fee's can NOT be charged to the borrower and MUST be charged to Builder and included in the FINAL sales price of the home or be absorbed by the Builder.
These fee's are not much more than a conventional construction loan. Most lenders charge 1% to 2% origination points with very similar constitution fee's and the construction interest rate is usually around 5%. Plus you get a 30 year fixed loan and not an adjustable rate mortgage.
VA Construction Mortgage Loan Requirements
- 640 Credit Score Required. 0% Down Payment.
- Gift Funds are ok.
- No Foreclosures or Short Sales last 3 years.
- 700 credit score for VA Jumbo Construction Loans.
- VA Construction Mortgage Loan Program Requirements Primary Residence only.
- Single Family Homes only. Florida only.
- Borrower can not perform any of the work.
- Minimum Loan amount $175,000.
- Swimming pools are not allowed to be included in the loan.
President Senior Loan Officer
First Florida Financial Group, LLC