VA Construction Loan

Has anyone gone through USAA or any other lender for a VA Construction loan to build a new home? Any suggestions on what to look for when going through the process?

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I was told USAA doesn't do those type loans.  I found NC Farm Credit Loans to be the right fit for me.  If you want to refi after that or do a VA loan then you can use USAA.

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It would be great if someone could get a hold of me on the matter trying to sift through all of the information is a lot. I would rather hear it from the proverbial "horse's mouth" just trying to get a construction loan, or the guarantee letter... thanks

82nd CAB,


I have asked a bank team member to reach out to you as requested. Thank you.



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I was told the same thing, then mentioned the VA Construction loan i read on here, and Things changed. If you say VA Construction loan, USAA does deal in those. Regular Construction loans, No.
To the last reply, since USAA and VA do not do construction loans, could you not complete your project with a bank loan and then secure a VA loan at a typically lower interest rate? I am new to all of this, but my husband and I are looking at property to purchase this Spring to build on in a few years. We hope to have the land paid for and then begin construction after the land is paid off. Any suggestions would be most appreicated.
bpab- We are in the same boat, trying to build "the dream home" in a non military community. Having a difficult time finding a bank that believes the VA construction to mortgage loan is worth the red tape... were you able to find success??
This discussion is valuable to us. We are trying to purchase land, build a home and finance using a VA loan. USAA does not do construction loans, only mortgage loans. VA does not do construction loans, only mortgages. So i am turning to a local bank to request financing for the construction loan. This loan may or may not include the cost of the land, depending on how we structure it with the builder and also with the seller of the land. The consideration for how to finance the land and the construction and the ultimate mortgage is how many times must we pay closing costs and go through the paperwork to get the home we have dreamed of for decades? It is a daunting process and requires upfront money from us. The VA loan is supposed to allow veterans the opportunity for home ownership with little upfront cost, but only applies to a constructed building, not an imagined, architected, house under construction. The VA mortgage is based on the existing value of the house and land. If it isn't complete (with proper permits) the value is not real... yet.
I engaged USAA but they informed me they did not do construction loans. I worked with a local bank for that. Finding a bank was difficult particularly since we were working as our own general contractors. It took about 3 months to secure the loan once we had the bank. A complete budget and timeline and countless documents were required.... Down to plumbing and electrical fixtures, floors,... They pay out to our subcontractors or to us via a monthly invoice process. We compile to them and submit and via a title company checks are issued (they do not provide any funds upfront). Lien waivers are required by everyone involved on every payment. Stuff we had done before the loan we had to go back and get lien waivers.... Additionally they required (and we had to pay for) inspections along the way. We are now getting close (yay!) to finishing the house and are working to convert the construction loan to a USAA mortgage.

.I have construction loan and ill be interested in information on converting this loan to a mortgage.House is nearly complete.I bank with the bank where i have the const. loan and they will do a mortgage,but would like to get a better rate here if possible.Don't know what rate will be yet.Also don't know if they will move mortgage some other institution.Any info you  provide will be appreciated.Thank You,LW

The best way for you to get accurate pricing for your situation is to call and talk to a mortgage specialist at 1–800–531–8722 (USAA) . There are also a few online calculators you could use, but I think the easiest and most accurate way to get the information you need is a quick phone call! Congratulations on your new home!

The difference in these two conversations depends on WHO is carrying the construction loan. The case of the person whose house is almost complete, they do not have a construction loan. They have a regular VA loan that will start when they buy the house from the builder. In this case, the builder has went out and got the construction loan himself and sells the new home to the buyers after completion. If you are needing a construction loan, you can apply for one and then just tell the lender that when the home is complete, instead of turning it in to a long term conventional loan you want to turn your short term construction loan in to a VA loan. If you build the house yourself, beware because VA is looking for some specific items in a home in order for them to finance it. It is much easier if you hire a builder that knows how to build to VA standards and has a VA code. Consult your lender on requirements of the home on a VA loan.

would you have to have to closing if you switch loans?

I've been told the same thing--they don't do construction loans.



I think (I am not an expert in this area) that the discrepancy arises depending on the type of loan.


Here are some details an expert as USAA provided:


Typical Construction Loan - The builder draws funds as needed during the various stages of construction ie. Pouring the slab, framing, drywall etc - The borrower only pays interest on the drawn amount - The bank requires inspections prior to each new draw to ensure the previous work has been completed - Upon completion, a new, permanent loan will be facilitated and a separate closing will be required


New Construction Loan - There are no draws, the builder pays for construction - If a conventional loan is used, the initial appraisal is based on the plans and specs provided by the builder and final inspection will be performed to ensure completion -


If a VA loan is used, the appraisal takes place once the home is 95% complete and a final inspection will be performed to ensure completion.


I encourage anyone with specific questions and concerns to call and talk to an expert! 1-877-314-2255

They will be able to answer any specific questions and provide you with the most up to date and relevant information!

I don't understand how one person could receive a "we don't do construction loans" answer from USAA and another person is already close to building a home with them. I'm pretty sure they also told me that they don't do construction loans. Is it based on City/State?

I asked an expert here at USAA to send along any comments he had on this topic and here is what he had to say... 


1. You will need to ensure the builder is VA approved, if not, getting them approved is a simple and fast process. We can help! Unfortunately this is not true if the project is a condo.


2. If the builder is building a neighborhood and an HOA is formed, ask if the the voting rights have been released to the association. If not, it could pose a problem for loan approval.


3. Its important to note the home must be 100% complete in order to close on the loan. Escrow holdbacks to complete unfinished items are generally unacceptable"



I hope this information helps!


I have some specific questions about VA construction loans through USAA.  Your post back in 2012 was perhaps the most promising tidbit of information I could find on the subject. Would you please respond via the following email address?





USAA Member since 1987



Thank you for reaching out to the community. Unfortunately, Community Managers do not respond back to members out of channel. But I did forward your request to someone who will be able to assist you. Thank you so much for your membership!