A Construction to Permanent VA Mortgage is a specific type of home loan designed for veterans, active-duty service members, and eligible spouses. It combines the benefits of a VA loan with the flexibility of a construction loan, allowing borrowers to finance both the construction of a new home and its conversion into a permanent mortgage under the VA loan program. This type of loan is particularly beneficial for those eligible for VA benefits who wish to build their homes.

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Here are key aspects of the Construction to Permanent VA Mortgage:


  • VA Eligibility: Borrowers must meet the standard eligibility requirements for a VA loan, which typically includes service members, veterans, and their spouses.
  • Credit and Income Requirements: Similar to traditional VA loans, borrowers need to meet specific credit and income criteria set by the lender.


  • Zero Down Payment: One of the significant advantages of VA loans, including construction-to-permanent loans, is the possibility of zero down payment.
  • VA Loan Benefits: Borrowers enjoy the benefits of VA loans, such as competitive interest rates and no private mortgage insurance (PMI).
  • One-Time Close: The loan covers both the construction phase and the permanent mortgage, with only one closing process, simplifying the financing.

Construction Phase

  • Disbursement of Funds: Funds are disbursed in stages during construction to pay for building costs.
  • Interest-Only Payments: Borrowers typically make interest-only payments on the amount drawn during the construction phase.

Permanent Phase

  • Conversion to a Mortgage: After construction is complete, the loan automatically converts to a permanent VA mortgage.
  • Repayment Plan: Borrowers can choose from various repayment plans, like fixed-rate or adjustable-rate mortgages.


  1. Find a VA-Approved Lender: Not all lenders offer this type of loan, so it’s important to find one that is experienced with VA construction loans.
  2. Get Pre-Approved: Understand your budget and borrowing limits.
  3. Hire a Qualified Builder: The builder must be licensed, insured, and approved by the lender.
  4. Submit Plans and Costs: Provide detailed construction plans and cost estimates for approval.
  5. Close on the Loan: Once approved, the loan closes, and construction can begin.


  • Tailored for Veterans: These loans are specifically designed to support the home-buying needs of veterans and service members.
  • Flexibility: They provide the flexibility to build a custom home while enjoying the benefits of a VA loan.


  • Complex Process: The process can be more complex and lengthier than standard home loans.
  • Construction Delays: Potential delays in construction can impact timelines and costs.
  • Limited Availability: Not all lenders offer this type of loan, and finding a qualified builder who meets VA and lender requirements can be challenging.


A Construction to Permanent VA Mortgage is an excellent option for those eligible for VA benefits who want to build their homes. It offers a combination of the benefits of VA loans with the flexibility needed for home construction. As with any complex financial product, it’s advisable to consult with us today and carefully evaluate your financial situation and construction plans before proceeding.

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