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VA One-Time Close Advantages for Veterans, Military Retirees, Active Duty


VA One-Time Close Advantages for Veterans, Military Retirees, Active Duty
Why should military members and families consider a VA One-Time Close (OTC) construction mortgage? There are many advantages to building instead of buying an existing home and a lot of those advantages are as much about being able to approve the design of your home and making sure it meets your needs and goals before the ground even gets broken on the construction site.

In fact, it’s a very good idea to compare the financial advantages of a VA OTC construction loan AND the non-financial ones to other types of construction loans so you can make a truly informed decision. Here are some of the non-financial advantages--plus one MAJOR financial incentive you should consider.

The Borrower Chooses the Design

Build with plans you select--the design, size, and features of your home are wide open to you in the planning stages of your construction loan. This is true for FHA and USDA construction loans, too; each program has its own rules and requirements.

But military borrowers tend to consider the VA option first because A) it’s a known and trusted resource and B) the Department of Veterans Affairs provides some extra support for VA borrowers that isn’t necessarily available with other types of construction loans. If you get into financial trouble down the road, you can call the Department of Veterans Affairs for assistance if you have difficulty making arrangements with the lender.

The Borrower Does Not Act as Their Own Builder

If you search the VA loan rules in VA Pamphlet 26-7, the VA Lender’s handbook, you’ll learn that technically, VA One-Time Close mortgages typically allow the borrower to act as their own contractor. However, lender standards ALSO apply and most lenders won’t allow you to act as your own builder.

We know what you’re thinking--how is THAT an advantage? For military borrowers who are still subject to TDYs, deployments, or permanent change of station moves, not acting as your own contractor takes the pressure off you to get the work done within the specified time frame you agree upon with the lender. For military retirees, especially recent retirees, there are many other things that will vie for your attention during the construction phase of the loan--borrowers might balk initially about not acting as their own labor force, but when the job is done you might be surprised at how many have changed their minds about that aspect of the project.

It also means that any delays or problems that might be encountered along the way won’t affect the BORROWER in terms of what corrective action needs to be take, but the CONTRACTOR. It’s not always a good idea to do it yourself, especially with such a large amount of money involved with specific deadlines which must be met.

The Biggest Financial Advantage

The VA One-Time Close mortgage is like any other VA mortgage--there is no down payment required in most cases.

You WILL find that lenders may require money down for loans that exceed certain limits recognized by the lender--VA mortgages have no loan limits ever since legislation changed the program but most lenders still recognize county loan limits for other government backed mortgages--you may find a down payment is needed if the loan amount exceeds the lender’s limits--ask before you apply.

In any case, borrowers who don’t have to make a down payment--especially on a construction loan--have a big financial advantage over those who are required to put money down. It’s a very good idea to talk to a loan officer about the zero-down option and learn how this can help you build and buy your new home.

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OTC articles
VA One-Time Close Advantages for Veterans, Military Retirees, Active Duty

There are many advantages to building instead of buying an existing home and a lot of those advantages are as much about being able to approve the design of your home and making sure it meets your needs and goals before the ground even gets broken on the construction site.

The One-Time Close Construction Loan Process

What do buyers need to know about the One-Time Close mortgage loan process? This type of home loan is perfect for those who want to take their time to build a home to their specifications on their own lot or on land purchased in conjunction for the construction project.

What You Need to Know About VA Construction Loans

Comparatively speaking, buying an existing home is a faster process than building on your own land. But a VA construction mortgage gives you the ability to approve the design for your home, which makes the wait worth it for many borrowers. What do you need to know about this process?


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