Guide VA Single Close Construction Loans for New Home Construction

For veterans and active-duty military personnel who seek clarity, justice, and peace of mind from the start, building a home from the ground up is a significant decision. By streamlining the financing process and lowering surprises, a VA construction home loan can simplify the construction of new homes. This guide describes how VA Single Close Construction Loans operate, who is eligible, what to anticipate at each step, and how to get ready.

What Is a VA Single Close Construction Loan?

VA Single Close Construction Loan (also called a One-Time Close VA Construction Loan)
A va construction home loan that finances both the construction of a new home and the permanent mortgage in one closing. Borrowers lock terms once, close once, and move from build to living without reapplying.

Key traits

• One closing instead of two

• One set of closing costs

• Construction phase converts to a va home loan mortgage automatically

• Backed by the U.S. Department of Veterans Affairs

Why Veterans Choose a VA Construction Home Loan

Veterans often prefer a va construction loan because it reduces friction and keeps costs transparent. Compared with two-step construction financing, a single-close option lowers paperwork and shortens timelines.

Main benefits

• One approval, one closing: Fewer documents and less stress

• No down payment (for eligible borrowers, subject to lender rules)

• Competitive rates aligned with VA guidelines

• Builder oversight that protects the borrower

• Clear draw schedule during construction

How a VA Single Close Construction Loan Works (Step List)

Step 1: Confirm Eligibility

You’ll need VA eligibility (Certificate of Eligibility) based on service history. Most lenders verify this early.

Step 2: Choose a VA-Approved Lender

Not every lender offers va construction mortgage programs. Pick one experienced with single-close builds.

Step 3: Select a VA-Approved Builder

The builder must meet VA and lender requirements, including licensing and insurance.

Step 4: Submit Plans, Budget, and Timeline

Provide construction plans, specs, and a detailed cost breakdown. This becomes the basis for underwriting.

Step 5: Underwriting and Appraisal

The lender reviews credit, income, and the project. The appraisal is based on future value once the home is complete.

Step 6: One-Time Closing

You close once. Funds are set aside for construction draws.

Step 7: Construction and Draws

Funds are released in stages as work is completed and inspected.

Step 8: Move-In and Convert Automatically

When construction ends, the loan converts into a permanent va home loan mortgage—no second closing.

VA Single Close vs. Traditional Construction Loans

VA Construction Loan Requirements (Borrower & Builder)

Borrower

• VA eligibility

• Stable income and acceptable credit

• Primary residence intent

Builder

• VA registration and lender approval

• Insurance and licensing

• Agreed draw schedule and inspections

Frequently Asked Questions 

1. What is a VA Single Close Construction Loan?

A VA Single Close Construction Loan is a va construction home loan that finances home construction and the permanent mortgage together. You close once, lock terms once, and avoid applying for a second loan after construction is finished.

2. Who is eligible for a VA construction home loan?

Eligible borrowers include veterans, active-duty service members, and qualifying spouses who meet VA service requirements. You must also plan to live in the home as your primary residence and meet lender credit and income guidelines.

3. Is a down payment required for a VA construction loan?

Most eligible borrowers can build a home with no down payment using a va construction loan, as long as the total loan amount meets VA and lender requirements. This is a major benefit compared to non-VA construction loans.

4. How are funds released during construction?

Funds are released in stages called draws. Each draw is issued after inspections confirm that specific construction milestones, such as foundation or framing, have been completed according to approved plans.

5. Does the loan convert automatically after construction?

Yes. Once construction is complete, the va construction mortgage automatically converts into a standard va home loan mortgage. No refinancing or second closing is required, saving time and closing costs.

Conclusion

A va construction home loan through a VA Single Close Construction Loan offers a simpler, clearer way to build a new home, without the hassle of multiple closings or duplicate costs. From eligibility and builder approval to inspections and automatic conversion, the process is designed to protect veterans while keeping projects on track. If you’re planning new construction and want a single, straightforward path, explore how GoMortgage supports VA Single Close Construction Loans with guidance built around veterans’ needs, so you can focus on building a place that truly feels like home.