Build Your Home with a VA One-time Close Construction Loan
If you are a Veteran ready to build a brand-new home, the VA One-Time Close Construction Loan finances your land purchase, your entire construction, and your permanent 15- or 30-year fixed-rate mortgage as a single transaction. You qualify once. You close once. And your mortgage rate is locked in before your builder pours the first foundation.
- Rate Locked Before Ground Breaks
- Single Application & Closing
- Custom Home, VA Benefits
- No PMI Required
What makes the VA OTC Loan Different
This program is built for one purpose: financing the construction of a new home from the ground up on a lot you purchase or already own. It is not a purchase loan for existing homes. It is not a renovation loan. It is a construction-specific VA benefit that covers every phase of building a new primary residence — from acquiring the lot to the finished home. A VA one-time close construction loan covers:
- Land purchase and builder’s fixed-price construction contract
- VA funding fee and required contingency reserve
- Title, permits, appraisal, and other allowable soft costs
- Construction interest reserve—no out-of-pocket payments during build
Already own land? Learn how your land equity can count toward your custom home construction.
Is a VA One-Time Close Construction Loan the Right Fit for You?
The VA OTC loan tends to fit these situations well.
First-Time Custom Home Builder
You've never built a home before and want a clear, single-closing structure that doesn't require you to manage multiple loan products simultaneously. The OTC loan gives you one point of contact, one set of terms, and one closing — reducing complexity from day one.
Veteran Buying Land AND Building
You haven't purchased land yet and want to finance land acquisition and home construction together in a single transaction. The VA OTC loan allows you to close on the land and lock your construction and permanent financing at the same time.
Service Member Concerned About Rate Volatility
You're building in a rate-uncertain environment and want your permanent mortgage rate protected before construction begins. Lock your permanent rate upfront with a one-time close construction loan—eliminating uncertainty through your 12-month construction period.
Do any of these situations fit your needs?
Tell us where you are in the process and we'll map out the right path.
Eligibility for a VA One-Time Close Construction Loan
Meeting eligibility for a VA One-Time Close (OTC) loan involves both VA guidelines and lender-specific qualifications.
- Must meet VA service eligibility with a valid Certificate of Eligibility (COE)
- Credit score of at least 620 (larger loan amounts may need a higher score) with stable, documentable income
- Enough residual income for your family size (a higher debt-to-income ratio is often fine when residual income is strong)
- Property must be a primary residence (owner-occupied)
- Construction plan must involve an eligible property type and a qualified builder approved by the lender before closing
If most of these align with your scenario, you may be well-positioned to move forward. The next step is a personalized pre-approval discussion with a VA construction loan specialist.
Ready to take the next step? Connect with Shirley Mueller, Sr. VP of Veteran Lending to review your eligibility, explore your options, and get expert guidance through the VA OTC loan process.
Step-by-Step Process: From Land to Keys
Building a home has a lot of moving parts, but with a VA One-Time Close construction-to-permanent loan, everything is structured into one streamlined process and one closing.
Verify VA Loan Eligibility
Obtain your Certificate of Eligibility (COE) to confirm you qualify for VA loan benefits based on your service history.
Get Pre-Approved by a VA-Approved Lender
Work with a lender experienced in VA construction loans to determine your budget, creditworthiness, and loan amount.
Select a Builder and Finalize Construction Plans
Choose a qualified builder (licensed where your state or city requires it) who will be approved by the lender before closing, and develop detailed home plans, specifications, and a fixed-price contract that meet VA guidelines.
Loan Underwriting and Appraisal
The lender reviews your financials, builder credentials, and construction plans. A VA appraisal is completed based on the plans and specifications to determine the value of the finished home.
Close the Loan (Single Closing)
You complete one closing that covers both construction and permanent financing. Funds are placed in an escrow account for construction.
Construction Phase and Loan Conversion
The builder draws funds in stages during the 12-month construction period. Once completed, the loan automatically converts into a permanent VA mortgage with regular monthly payments.
see the VA construction loan process timeline
Why Trust Shirley Mueller for VA One-Time Close Financing
VA One-Time Close construction loans are among the most complex mortgage products in the residential lending market. They require a lender who understands both VA loan regulations and the operational demands of a construction transaction — builder approvals, draw schedules, inspections, and timeline management.
VA Loan Expert Shirley Mueller, Sr. VP of Veteran Lending (NMLS #336103) has specialized in VA home loans for over 20 years. The VA One-Time Close program is available in the 48 contiguous states and D.C., but state-specific licensing, building codes, and local builder markets can affect your project. Shirley’s team handles your loan from start to finish wherever you build.
We provide a clear construction loan guide to every borrower before closing. No surprises on draw procedures, inspection requirements, or conversion timelines.
What Sets Us Apart
Simplified One-Time Close Process
With a VA One-Time Close construction loan, the build and the permanent mortgage are financed with one loan and one closing, so you pay one set of closing costs.
Expertise in VA Construction Lending
Work with a specialist who understands the ins and outs of VA construction loans. VA Loan expert Shirley Mueller provides clear guidance every step of the way, so you meet VA requirements at each step of the build.
Transparent, Guided Process
You’ll receive a clear construction loan roadmap before closing, outlining draw schedules, inspection steps, and the transition to your permanent loan—so you always know what to expect.
What goes into the loan: see how a VA construction loan is figured, from the lot and build to the interest reserve, fees and your payment after the build.
Frequently Asked Questions
What is a one-time close construction loan?
A one-time close (single-close) construction loan combines construction financing and permanent mortgage into one loan, requiring only one closing and reducing overall costs.
Can I act as my own general contractor (owner-builder)?
No. Our VA construction loans don’t allow owner-builders or DIY work. You’ll need a qualified builder approved by the lender before closing. Learn more about owner-builder rules.
Do I need to make mortgage payments during construction?
No. The interest reserve and construction management fee are built into the loan amount and paid by the builder, so you make no payments during the 12-month construction period.
What is the VA funding fee for a construction loan?
The VA funding fee depends on your down payment and whether you’ve used your VA home loan benefit before. For 2026 it is 2.15% for first use with less than 5% down (1.5% with 5–10% down, 1.25% with 10% or more), and 3.3% for subsequent use with less than 5% down. It can be financed into the loan rather than paid out-of-pocket at closing. Veterans receiving VA disability compensation are exempt. Check your COE or VA.gov to confirm your status.
Can I use a VA OTC loan to build a second home or investment property?
No. VA loan benefits, including the One-Time Close construction program, are exclusively for primary residences that you personally occupy. Investment properties, vacation homes, and rental properties are not eligible.
How is a VA OTC loan different from a VA renovation loan?
A VA OTC construction loan finances the building of a new home from the ground up. A VA renovation loan (such as a VA rehabilitation loan or VA cash-out refinance used for improvements) applies to existing properties. These are distinct programs with different requirements.
Get Started Today
Connect with VA construction loan lender Shirley Mueller, Sr. VP of Veteran Lending, and her team to start your VA one-time close construction loan.