VA loans are not limited to purchasing existing single-family homes.
VA entitlements and loan guarantees can also be used for other purposes such as: • Purchasing condos • Refinancing existing mortgages
• Making residential improvements • Financing new construction projects
Building a new home can be a very appealing option for veterans who would like to have more control over their choice of housing ‌
‌ to this effect, VA loans can be used for spec homes, custombuilt residences or even new construction projects in gated communities.
The no-money down and loan guarantees offered by the VA apply to new construction, but not all lenders will work with veteran borrowers in this regard.
One problem with VA loans and new construction projects is that home builders tend to demand money upfront.
A few builders familiar with the VA loan program will work with veterans and active duty families who wish to build a new home‌
‌this is when well-connected mortgage brokers and lenders have an opportunity to shine if they have a working relationship with builders who understand that VA loans forego down payments.
There are options to process what is known as a "true" VA construction loan‌ ‌which involves drawing funds from the mortgage principal and making payments to the builder as the construction advances.
Another method involves approving veteran borrowers for short-term construction loans‌ ‌that will transform into full VA loans once the project is completed and papers are signed at the closing table.
VA loans for construction projects must satisfy all the requirements of non-construction loans; this means that they will need: • VA appraisals
• Special processing
• Certificate of eligibility • Builder must submit a certificate of completion and a construction warranty of at least 1 year.
The process of purchasing an existing home with a VA loans is a lot more streamlined and traditional.
The same VA lending standards will apply, but applicants do not have to worry about issues such as shortterm construction financing.
Veterans who prefer to purchase newly built residences may be better off by looking into residential communities being developed by local or national builders.
The options in this case may include purchasing model homes or waiting until a new phase or section of the neighborhood is completed‌
‌this will require working closely with real estate professionals and VA lenders so that the purchase contract can be signed quickly to avoid other prospective buyers from submitting competing bids.
In active housing markets such as Phoenix, veterans have more choices for purchasing new construction homes due to the rapid pace of development in the region.
Quite a few master-planned developments and gated communities with neat amenities are being completed in 2017 such as:
• Nature preserves • Swimming pools • Fitness centers • Playgrounds
These new developments are great opportunities for veterans who wish to move into new homes without having to go through the VA loan construction process.
In fact, these homes can be combined with the Home in 5 Program, which is partly managed by the Industrial Development Authority of Maricopa County‌
‌this program can significantly reduce out-pocket-expenses associated with new home purchases.
In the end, veterans should not be afraid to ask lenders about using VA loans to fund their new construction dream projects.
However, they should also keep in mind that new homes can also purchased through traditional VA loan means.
Mortgage Originator Jimmy Vercellino, specializing in VA loans, helps veterans use their VA loan benefit to their greatest advantage.
Be a proud homeowner today. For more details call 480-351-5904 or visit the site www.valoansforvets.com
VA Loans for Vets 7600 E. Doubletree Ranch Road #200 Scottsdale, AZ 85258 Phone: (480) 351-5904 Email: jimmyv@fcbmtg.com