5 Must Know Facts When Using Your VA Loan on New Construction

When it comes to using your VA loan for new construction, there are crucial details that military personnel and their families need to be aware of. Navigating the process requires a solid understanding of the nuances involved. Here are five must-know facts to ensure a smooth experience:

Fact 1: VA Loan Eligibility for New Construction

Before delving into the world of new construction, it’s essential to ensure your eligibility for a VA loan. The Department of Veterans Affairs outlines specific criteria for eligibility, considering factors such as service duration and discharge status. Familiarize yourself with these requirements to streamline the loan application process.

Fact 2: Builder Approval and VA Compliance

Not all builders are VA-approved, and not all new construction meets VA compliance standards. It’s crucial to work with a builder who understands the intricacies of VA loans and adheres to the necessary guidelines. Confirming the builder’s approval and project compliance will save you from potential roadblocks later on.

Fact 3: Funding Fee Considerations

While VA loans offer significant benefits, they come with a funding fee. Understanding how this fee applies to new construction is vital. In some cases, the funding fee can be rolled into the loan amount, easing the upfront financial burden. Explore your options and consult with a knowledgeable lender to make informed decisions.

Fact 4: Timelines and Contingencies

New construction projects often come with unpredictable timelines and potential contingencies. It’s essential to have a clear understanding of the expected completion date, as well as any potential delays. Consider adding contingencies to your contract to protect your interests in case of unforeseen circumstances.

Fact 5: VA Appraisal and New Construction

VA appraisals play a crucial role in the loan approval process. When dealing with new construction, it’s important to ensure that the property meets VA appraisal standards. Work closely with your real estate agent and builder to address any issues flagged during the appraisal, ensuring a smooth path to loan approval.

In conclusion, using your VA loan for new construction requires careful consideration of eligibility, builder approval, funding fees, timelines, and property appraisals. Armed with this knowledge, military personnel and their families can confidently navigate the complexities of new construction, ensuring a successful and stress-free home buying experience. For any further real estate assistance, reach out to Raoul Rowe at Ready Front Real Estate by calling (737) 276-1953 or visiting www.readyfrontrealestate.com. Your dream home awaits!

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