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Old 11-25-2017, 11:40 PM
 
Location: Boise, ID
24 posts, read 8,696 times
Reputation: 20

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Hi,

My husband is a Veteran & through him we are eligible for a VA loan. We are hoping to have a home build in upstate NY however I am not sure if VA loans allow this. Does anyone have any experience with a new build with a VA loan? Was it a hard process? So far the builder has said we will need to have 5% in order for them to start building. Which confused me since VA loans can be 0 down.

I look forward to your responses.

Thank you,
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Old 11-26-2017, 08:45 AM
 
Location: New Mexico U.S.A.
23,068 posts, read 35,529,347 times
Reputation: 26787
We tried to get a "VA Construction Loan" 30+ years ago and there were a lot of issues, the main was having cash to do it, so we bought our first home with a VA loan of an already built home instead...

You might read:

VA Construction Loans: How to Build a Home with a VA Loan
by Samantha Reeves
Published: April 11, 2017

https://www.veteransunited.com/valoa...ith-a-va-loan/
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Old 11-26-2017, 10:02 AM
 
128 posts, read 83,192 times
Reputation: 243
Our contractor agreed to start construction on our home with a 5% down payment/deposit. After the house was far enough along to allow an appraisal, we were able to apply for a VA loan. I think it would be very difficult to find a contractor who would start a build without any money coming from you at the beginning. Nor do I think a bank will loan money until the house is built. Of course, construction loans are a whole different kettle of fish, but get the feeling from your post that you just want to apply for your VA loan and start construction with no money down. That would be a rare deal. I wish you the best.
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Old 11-26-2017, 10:12 AM
 
Location: Boise, ID
24 posts, read 8,696 times
Reputation: 20
Quote:
Originally Posted by TomC23 View Post
Our contractor agreed to start construction on our home with a 5% down payment/deposit. After the house was far enough along to allow an appraisal, we were able to apply for a VA loan. I think it would be very difficult to find a contractor who would start a build without any money coming from you at the beginning. Nor do I think a bank will loan money until the house is built. Of course, construction loans are a whole different kettle of fish, but get the feeling from your post that you just want to apply for your VA loan and start construction with no money down. That would be a rare deal. I wish you the best.
Thank you! Did you get the 5% back at closing or just used it as a down payment? The builder are are looking at us wanting 10% which would be $26K ☹️ Some new subdivisions have homes already built just waiting to be brought. Maybe that would be an option we will look into.

Last edited by Eaglewings1; 11-26-2017 at 11:02 AM..
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Old 11-26-2017, 01:46 PM
 
3,111 posts, read 1,386,770 times
Reputation: 2380
Quote:
Originally Posted by Eaglewings1 View Post
Thank you! Did you get the 5% back at closing or just used it as a down payment? The builder are are looking at us wanting 10% which would be $26K ☹️ Some new subdivisions have homes already built just waiting to be brought. Maybe that would be an option we will look into.



I looked into this a long time ago. I doubt if things have changed much. The part I remember being difficult is I believe you need inspections done and approved all during the construction process. You have a lot more "hoops" to jump through than if you simply bought a home already constructed. Its your choice... but if it were me I would buy a new home already constructed.
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Old 11-26-2017, 04:44 PM
 
128 posts, read 83,192 times
Reputation: 243
Quote:
Originally Posted by Eaglewings1 View Post
Thank you! Did you get the 5% back at closing or just used it as a down payment? The builder are are looking at us wanting 10% which would be $26K ☹️ Some new subdivisions have homes already built just waiting to be brought. Maybe that would be an option we will look into.
We rolled the 5% into the down payment at closing. Looking at homes that are already being built would probably be the way to go for you guys. If you start early in the process you should be able to do a lot customization as the house is being built. That is a good way to make a house your own.
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Old 11-30-2017, 03:03 PM
 
Location: Middletown, DE
102 posts, read 35,814 times
Reputation: 279
Quote:
Originally Posted by jeffdoorgunner View Post
I looked into this a long time ago. I doubt if things have changed much. The part I remember being difficult is I believe you need inspections done and approved all during the construction process. You have a lot more "hoops" to jump through than if you simply bought a home already constructed. Its your choice... but if it were me I would buy a new home already constructed.
Agreed. There are all sorts of pitfalls in contracting for a custom home.

I'm pretty sure that a Certificate of Occupancy (CO) must be issued before a final VA appraisal can be done for the mortgage. In most jurisdictions that CO won't be issued until the build is finished and all of the required code inspections were conducted and passed during the construction. Financing of the construction is an entirely different matter, separate from the VA backed mortgage.

Our last two homes have been new construction that didn't start until we were under contract. Both were seamlessly financed with 0 down VA loans. However, they were tract homes being built in developments and the construction was financed by the corporate builder. They weren't custom homes, be we got to choose our own finishes, options and upgrades. And of course we selected from among several floor plans and lots within the development. Not our ideal dream homes in every respect. But very nice, well built houses that we were/are very happy in. And new is...well...new!
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Old Yesterday, 12:52 PM
 
Location: Columbus, OH
752 posts, read 419,733 times
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Yes. Back in 2001. Used my VA loan for a new build home. Very easy.
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Old Today, 04:18 PM
 
1,310 posts, read 1,902,181 times
Reputation: 1279
I had two friends build "custom homes". Both regretted it by the end and later told me it would have been cheaper to have bought something that was already built or recently renovated. It sounded like an expensive nightmare to be honest. Your best bet would be to look for suburb builders like KB Home if you want something semi custom. Getting something built exactly to your spec is extremely expensive.
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