One-Time Close Loans | FHA, VA, and USDA
Learn all about the VA, USDA, and FHA versions of the One-Time Close Loan.

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VA Loan - One-Time Close Construction Loan
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VA One-Time Close Construction Loans for Military Officers

VA One-Time Close Construction Loans for Military Officers
Are you an officer in the Army, Navy, Air Force, Marine Corps, Coast Guard or United States Space Force? If you are nearing the time when you want to “drop papers” to begin your military retirement process, home ownership is likely on your mind.

And officers about to retire who explore their options to build a dream home instead of buying someone else’s house have some very unique advantages when using a VA One-Time Close construction loan to build instead of buy.

Down Payments and VA Loan Funding Fees

The biggest hurdle for some home buyers is the down payment. VA construction loans allow zero down, and borrowers who receive or are eligible to receive VA compensation for service-connected disabilities are allowed to apply for an exemption to the VA loan funding fee.

That means a significant number of military officers who have served before or since 9/11 may qualify for a home loan without having to pay two of the biggest expenses associated with these mortgages in general.

Officers getting ready to retire are in a unique position to use a VA construction loan to build--after a 20 year career in uniform or longer, the amount of borrowing power an officer with good credit has goes a long way toward building a forever home. Why? 

Take Your Time Building Your New Home

Construction loans take time; those investing the money to build instead of buy should not be in a hurry--its best to come to the process expecting the job to take time to be done properly. You’ll have to make other arrangements for temporary living space while your home is being built and inspected, but an officer who knows she will retire within a few years (or even next year) can get a head start on a construction loan by applying before the estimated date of retirement or separation.

In such cases, they key to loan approval may be showing how you will be able to afford the loan after leaving military service.
Those with retirement plans can show the lender how their post-military income will let them afford the home loan, but if you plan on continuing a career post military, it’s best to consult with a participating VA lender as early as possible to ask when considerations should be made when planning a home purchase on the cusp of retiring.

You may find that applying for the home loan after you’ve started your new civilian career is more advantageous when it comes to loan approval but don’t assume--talk to a loan officer to learn what the best course of action is if you plan to retire or separate but want to continue working.

Much will depend on your income, its stability, and whether or not it is sufficient to meet your current expense AND the mortgage. If your retirement pay and other savings/investments/etc. Are enough to meet lender standards without additional income, you may be able to move ahead with your construction loan even if you aren’t working.

What to Have Ready

When you talk to a loan officer, be sure to have information about your current credit scores, residual income from 401(k)s or other investments, your military retirement pay, and any other source of income that could help influence the lender’s decision to approve your VA One-Time Close mortgage application.


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OTC articles
One-Time Close Construction Loan Requirements

 While it’s true that building a home from scratch can at times be harder than buying an existing home, the effort is worth it. The key to getting started is to understand the requirements of these loans, but some are hesitant because the process is unfamiliar to them.

Before You Apply: Four One-Time Close Loan Tips

What do you need to know about One-Time Close mortgages before you apply for one? There are some issues to be aware of that can save you time and frustration--knowing before you start filling out application forms is a big help!

VA One-Time Close Construction Loan Availability

How can you avoid wasting time when you’re interested in applying for a VA One-Time Close mortgage? The first thing to remember is that not all lenders are as well-versed in this type of mortgage as you might expect.

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