Can VA homeloans be used to buy land and have a house built on it?

2020-10-27T23:39:43-04:00

I've been trying to search the VA's website but either I'm constantly skipping past it or can't find the answer. I'm looking to have a house built but unsure if I can do that with a VA homeloan. If anyone has any advice, tips, or answers, please leave them below.

Response by COL Private RallyPoint Member made Oct 28 at 2020 12:23 AM

2020-10-28T00:23:11-04:00

Bottom line. Yes you can. But it’s a long and tortuous process and all expected costs need to be verified thrice over from builder and then banks appraiser.
The guidance has been changing a lot so your best bet is to get a mortgage specialist well versed in VA loans and they’ll square you away. Good luck
Again it’s not impossible but it’s much easier to just buy a new construction.

Response by LtCol Robert Quinter made Oct 28 at 2020 5:24 AM

2020-10-28T05:24:03-04:00

Yes. You have to realize the VA is just the insurer of you loan and the most obvious advantage is you don't have that loan insurance cost added to your monthly payment. The agency that provides your loan (bank or mortgage company) is the best source of information since they must remain current on VA requirements.
When I built my home years ago, there was a VA imposed requirement for inspections of various systems or features (foundation, electrical, plumbing, etc) as the building process proceeded. The inspections provided another set of eyes to ensure the contractor and subs were conforming to codes and standards.

Response by CW4 Anthoney Lowry made Oct 28 at 2020 7:47 AM

2020-10-28T07:47:38-04:00

yes you can, kind of. i am currently building a house. you need to get a normal construction loan during the build process. and then close to the completion date, you refinance(might not be the right term) into a VA loan. there is tons of paper work, i think i sent the bank over 100 pieces of paper. and there are a lot of inspections and appraisals. But it is a good process. it saved me from making a $50,000 mistake when the house we originally wanted to buy did not appraise for what they were asking. VA would not back the loan and the builder refused to even negotiate about a lower price. so we walked away free and clear because of the VA loan clause that should be in every contract.

Response by PO1 Lyndon Thomas made Oct 28 at 2020 10:16 AM

2020-10-28T10:16:03-04:00

I've asked this one a million times over 20 years or more, and no on seems to have a direct answer.

Response by Cpl Vic Burk made Oct 28 at 2020 5:02 PM

2020-10-28T17:02:13-04:00

The best place to call for answers is your local V.A. office. I tried something similar to this back in 1983 and they told me then that the house had to already be built and approved for habitation (they also had to have an inspection on the dwelling); the V. A. didn't do construction loans. Most likely you will have to get a construction loan first then get a V. A. loan to replace the construction loan. Now days a 100% is much easier to come by than during the depression of 1983. (Yeah, they called it a recession but to me it was more of a depression; the government didn't want to cause massive withdrawls from banks so they down played) Best of luck to you friend!

Response by Sgt Anthony Zona made Mar 8 at 2022 10:21 AM

2022-03-08T10:21:05-05:00

Not likely, to many things can go wrong in the process. They want to get you into a home that is "move in ready". Especially the first time you use the VA loan, no fixer uppers. That's a construction loan, either you have a history as a contractor building and paying back. Prove your capabilities, and you find a bank willing to do it. It's a VA backed loan but still a bank had to be willing to provide the loan with the promise that if you can't pay for any reason, the VA pays it. Like a FED backed mortgage. Only a few Banks around me offer these loans but try getting one. I think it's because mortgage loans for vets aren't very profitable to the banks.

Response by PV2 Mary Gilmartin made Apr 7 at 2022 12:27 AM

2022-04-07T00:27:15-04:00

I just attended a seminar where individuals assist only veterans and active duty personal in purchasing a home. I asked that same question regarding land. I was told that the land itself would not be part of a loan but a house could be built on land already acquired. One would have to acquire the land separately from VA assistance. I am probably going to seek assistance with a prefab construction. Many additional benefits have changed since 2020 for veterans who are seeking home ownership. Reach out to the VA in your area and I do hope this information helps you.