VA New Construction to Permanent One-Time Close Mortgages: 2025 Guide for Veterans
Buying a house is hard in today’s market. Finding one you actually like? Even harder. But what if you could build a brand-new home, just as you want, with no down payment and only one loan closing?
You can with a VA new construction to permanent one-time close mortgage in 2025.
At Gustan Cho Associates, we make this process simple for eligible veterans and service members. We work with approved VA construction lenders to help you build your home, finance the lot, and get permanent financing—all in one loan and one closing.
What Is a VA New Construction to Permanent One-Time Close Mortgage?
A VA New Construction One-Time Close Loan is a special VA-backed mortgage that lets you build a new home from the ground up. The loan includes:
- Purchase of the land (or use the land you already own)
- Construction costs
- Final VA permanent mortgage
- All with just one loan application and one closing
Unlike most construction loans, which require a bridge loan first, the VA One-Time Close eliminates extra paperwork, stress, and costs.
Build Your Dream Home with a VA One-Time Close Loan
Combine land, construction, and permanent financing into a single, stress-free VA mortgage.
Benefits of VA New Construction One-Time Close Loans in 2025
With the shortage of home inventory, many pre-approved home buyers are getting priced out of the housing market. Some homebuyers are leaving to lower-taxed and affordable housing states due to high home prices. Now with our VA New Construction To Permanent Loan Program, homebuyers can custom build their homes with one closing process.
There are many reasons why this is the best VA loan for building a home in today’s booming housing market.:
- 100% financing (zero down payment required)
- No monthly private mortgage insurance (PMI)
- No interest payments during construction
- One closing only – saves time and money
- Streamlined loan process from start to finish
- Work with approved VA builders to build your custom home
And best of all? You still get all the perks of a regular VA new construction loan—but with the power to build.
Who Can Qualify for a VA New Construction Loan?
This program is only for those eligible for a VA loan. You must:
- Be active duty, veteran, reservist, or qualifying surviving spouse
- Have a valid Certificate of Eligibility (COE)
- Plan to live in the home as your primary residence
And while VA itself has no minimum credit score, most investors offering this loan program through Gustan Cho Associates require a 620 credit score or higher.
Types of Homes Allowed for VA Construction Loans
When considering a VA One-Time Close Construction Loan, it’s important to know the types of homes that qualify for financing. Eligible properties include single-family stick-built homes and manufactured homes, provided they are placed on a permanent foundation and adhere to VA property guidelines.
These options ensure that you can construct a dwelling that meets your needs while taking advantage of the benefits of a VA loan.
However, specific restrictions exist on the properties that cannot be financed with this loan. Condominiums, multi-unit buildings, condotels, and non-warrantable properties are excluded, along with investment and vacation homes. The VA construction loan is intended solely for your owner-occupied primary residence, ensuring it supports veterans and active-duty service members in obtaining a home they will live in.
Can I Use Land I Already Own?
Yes! If you own land, you can use it in various ways. You can finance the lot as part of a VA loan, use land deeded to you, or even accept a land gift from family members. To proceed, we must verify your ownership and confirm that the land meets the eligibility standards set by the VA for property.
Step-by-Step: VA One-Time Close Construction Loan Process
Here’s how the VA New Construction Loan process works:
- Pre-Approval with Gustan Cho Associates
- Submit your Certificate of Eligibility (COE)
- Choose a VA-approved builder
- Finalize your construction plans and contract
- Appraisal is ordered based on plans and specs
- Final loan underwriting and approval
- One loan closing covers everything
- Construction begins!
We help coordinate everything between you, the builder, the title company, and the lender.
VA One-Time Close Mortgages: Hassle-Free Homebuilding
Lock in your interest rate from the beginning and simplify your construction financing process.
Credit Score and VA Construction Loan Requirements in 2025
When it comes to VA construction loans in 2025, Gustan Cho Associates collaborates solely with lenders who impose no additional guidelines, ensuring a streamlined experience for borrowers. This approach means there are no extra requirements beyond those established by the VA, leading to greater accessibility for those seeking loans.
Notably, no overlays on credit scores or debt-to-income (DTI) ratios indicate that if the Automated Underwriting System (AUS) approves the application, Gustan Cho Associates will follow suit.
To get a VA construction loan, you’ll need a credit score of at least 620, which certain investors insist on. The cool thing is that the VA doesn’t have a limit on debt-to-income ratios, so there’s more leeway in meeting the loan requirements. Instead, it all hinges on what automated systems find, making it easier for borrowers to qualify.
Is Manual Underwriting Allowed?
Yes, manual underwriting is allowed on VA new construction loans. This is ideal for:
- Borrowers with thin credit or no credit scores
- Those with past credit events (e.g., bankruptcy, foreclosure)
- Buyers who don’t get AUS approval
We work closely with borrowers who need manual underwriting and compensating factors to approve the loan.
VA Appraisal and Inspections During Construction
A common question: How does appraisal work with a VA construction loan?
The VA appraisal is based on plans and specs, not the finished home. During construction, the lender will also do:
- Draw inspections before funds are released
- Final inspection once construction is complete
We handle all this behind the scenes with the builder.
Why Work with Gustan Cho Associates for Your VA Construction Loan?
We specialize in helping borrowers that other lenders turn away. Here’s what makes us different:
- No lender overlays on VA loans
- Manual underwriting experts
- Over 210 wholesale lenders to choose from
- 7-day availability — nights, weekends, and holidays
- We handle everything in-house with personal support
We don’t just offer loans. We help you build your dream home with the support, knowledge, and experience you deserve.
Ready to Build with a VA Construction to Permanent One-Time Close Loan?
Let’s make it happen. Borrowers who need a five-star national mortgage company licensed in 50 states with no overlays and who are experts on VA new construction loans, please contact us at 800-900-8569, text us for a faster response, or email us at gcho@gustancho.com.
Build smarter. Close once. Move in when it’s done. With Gustan Cho Associates, it’s that simple.
Custom-Build Your Home with a VA One-Time Close
Enjoy simplified paperwork, one approval, and peace of mind during the entire homebuilding journey.
Frequently Asked Questions About VA New Construction Loans:
Q: What is a VA New Construction Loan?
A: A VA new construction loan lets eligible veterans and active-duty members build a brand-new home from the ground up. It includes the cost of the land, construction, and the final mortgage—all in one simple loan and one closing.
Q: Can I Build a Home with No Down Payment Using a VA New Construction Loan?
A: Yes! VA new construction loans offer 100% financing, which means you don’t need to put any money down if you qualify.
Q: Do I Need a Good Credit Score to Qualify for a VA New Construction Loan?
A: While the VA doesn’t have a set credit score rule, many lenders want to see at least a 620 credit score. At Gustan Cho Associates, we accept manual underwriting if needed.
Q: Can I Use Land I Own with a New VA Construction Loan?
A: Yes. If you already own land or a family member gives it to you, it can be included in your VA new construction loan—there is no need to buy new land.
Q: What Kind of Homes Can I Build with a VA New Construction Loan?
A: You can build a single-family stick-built home or a manufactured home on a permanent foundation. Condos, duplexes, and investment properties don’t qualify.
Q: How Does the VA Loan Process Work When Building a Home?
A: First, you get pre-approved. Then you choose a VA-approved builder, get your plans ready, and close on the loan—all before construction starts. The loan covers everything in one step.
Q: Will I Make Payments During Construction?
A: No. One of the best parts of VA new construction loans is that you don’t make any mortgage payments during the build. You start paying after the home is done.
Q: What if I Were Turned Down by Another Lender?
A: We can still help. Gustan Cho Associates works with borrowers who were denied elsewhere. We offer VA new construction loans with no overlays and manual underwriting options.
Q: Is There Only One Closing for the Whole Process?
A: Yes. VA new construction loans are one-time close loans, which means everything—land, build, and final mortgage—is completed in one single closing.
Q: How do I Apply for a VA New Construction Loan with Gustan Cho Associates?
A: Call us at 800-900-8569, text for faster service, or email gcho@gustancho.com. We’re open seven days a week and licensed in all 50 states, so we can help you get started with VA new construction loans today.
This blog about “VA New Construction To Permanent One-Time Close Mortgages” was updated on August 5th, 2025.
One Loan. One Closing. Your VA Home Built Easier
Discover how VA one-time close loans streamline building your dream home from the ground up.
How do VA renovation loans with one-time close construction work? I think it is called VA New Construction To Permanent One-Time Close Mortgages.
VA New Construction To Permanent One-Time Close Mortgages are a specialized loan product that allows eligible veterans and service members to finance both the construction of a new home and the permanent mortgage in a single loan transaction. Here’s how they work:
Key Features
Single Closing Process: Unlike traditional construction loans that require two separate closings (one for construction, one for the permanent mortgage), this product combines both phases into one loan with one closing, saving time and closing costs.
**VA Guarantee**: These loans are backed by the VA guarantee, which means no down payment is required (though some lenders may require a small down payment) and no private mortgage insurance is needed.
How the Process Works
Initial Approval: You get approved for the total project cost, including land (if not already owned), construction costs, and permanent financing.
Construction Phase: During construction, you typically make interest-only payments on the amount drawn. The lender disburses funds in stages as construction milestones are completed and inspected.
Automatic Conversion: Once construction is complete and the home passes final inspection, the loan automatically converts to a permanent VA mortgage without requiring a new application, credit check, or additional closing.
Rate Lock: Many lenders offer rate lock options to protect against interest rate increases during the construction period.
Requirements
– Must meet VA eligibility requirements and have available VA loan entitlement
– Construction must be for a primary residence
– Must use VA-approved builders and contractors
– Property must meet VA Minimum Property Requirements (MPRs)
– Detailed construction plans and specifications required
– Builder typically needs to be licensed and experienced
Benefits
– No down payment required in most cases
– No PMI required
– Competitive interest rates
– Single closing reduces costs and complexity
– Protection against rate increases during construction (with rate lock)
Considerations
– Limited number of lenders offer this product
– Construction timeline restrictions may apply
– May have higher interest rates during construction phase
– Requires more documentation than standard VA purchase loans
– Builder/contractor vetting requirements are typically stricter
This type of loan is ideal for veterans who want to build a custom home or are purchasing in areas where new construction is the primary option, while avoiding the complexity and costs of separate construction and permanent financing.