VA Construction Loans in Rhode Island

Building a new home in Rhode Island with a VA loan

Rhode Island is small, but building here takes careful planning. Open land is limited, many lots rely on a private septic system, and a good share of the most desirable property sits near the coast, where extra state review applies. A VA one-time close construction loan helps by wrapping the lot, the construction and your long-term mortgage into one closing, with $0 down on loans up to $1 million and no mortgage payments during the 12-month construction period.

If you're a Rhode Island Veteran planning to build, my team will learn what you're after and handle your loan from application to closing.

Where Veterans build in Rhode Island

Most new single-family construction happens outside the dense Providence core, where lots are larger and land still comes up for sale:

• Washington County (South County): South Kingstown, Charlestown, Richmond, Hopkinton, Exeter and Westerly.
• Kent County: Coventry, West Greenwich, East Greenwich and Warwick.
• Northwest Rhode Island: Glocester, Foster, Scituate, Burrillville and Smithfield, where wooded parcels with wells and septic are common.
• Aquidneck Island and the East Bay: Middletown, Portsmouth, Tiverton and Little Compton, close to Naval Station Newport and its Naval War College and undersea warfare center.

Quonset Air National Guard Base in North Kingstown, home to the 143rd Airlift Wing, also draws Guard members and their families to the southern part of the state.

Septic, wells and lot planning

If your lot isn't served by public sewer, you'll need a septic system approved by the state. The Rhode Island Department of Environmental Management (RIDEM) issues the permit for a new home's onsite wastewater treatment system. A licensed designer prepares the design and applies for the permit, and DEM reviews the site and inspects the installation.

This is one of the biggest variables on a Rhode Island lot. Soil conditions, groundwater and nearby wetlands can drive the type and cost of the system, so have a designer look at the land before you buy it, or make your purchase contingent on septic approval. If you'll be on a private well, plan for water testing as part of the appraisal and the VA minimum property requirements.

Building near the coast

Rhode Island's Coastal Resources Management Council (CRMC) generally requires a permit for construction on a coastal feature, such as a beach, dune, wetland or bluff, and for work within 200 feet of a coastal feature or tidal waters, including salt ponds. The CRMC application page explains what's covered. That review happens on top of the town building permit, so build it into your schedule before closing.

Coastal and low-lying lots may also fall in a FEMA special flood hazard area. When they do, flood insurance is required for a VA loan, and elevation requirements can affect the foundation design. Ask for a flood zone determination early. Storm exposure is a real factor anywhere along Narragansett Bay and the south shore, so talk to your builder about wind-rated windows, roofing and fastening.

Rhode Island builders and permits

Anyone doing residential construction work in Rhode Island must register with the Contractors' Registration and Licensing Board, including subcontractors. Electricians, plumbers and HVAC trades are licensed separately through the Department of Labor and Training. You can search a builder's registration through the Board before you sign anything.

Rhode Island uses a statewide building code for one- and two-family homes, but building permits and inspections are handled by the building official in your city or town. Zoning, setbacks and lot-size rules are local too, and they can differ a lot from one town to the next.

For the VA loan, the builder must be approved by the lender before closing and must work under a fixed-price contract. VA construction loans don't allow owner-builders or DIY work. Our builder information page walks through approval.

Disabled veteran property tax relief in Rhode Island

Rhode Island handles veterans' property tax exemptions largely at the city and town level. State law sets a basic veterans' exemption and lets each municipality adopt its own amounts, including additional exemptions for veterans the VA has rated totally disabled from a service-connected disability. Those amounts vary widely by town.

The statute also provides an exemption for a totally disabled veteran's home acquired or adapted with VA specially adapted housing assistance, and for a veteran with a total and permanent service-connected disability whose homestead was acquired or modified with a VA specially adapted housing grant, the home can be exempt from all property taxes, with a possible continuation for a surviving spouse. Because so much depends on the town, call your local tax assessor to confirm what applies and when to file. You can also see our property tax exemption by state overview.

Qualifying and planning your budget

VA construction loans start at a 620 minimum credit score, and larger loan amounts may need a higher score. Residual income carries a lot of weight in VA underwriting, and Rhode Island falls in the VA's Northeast region for residual income. A higher debt-to-income ratio is often fine when residual income is strong. If you receive VA disability compensation, you don't pay the VA funding fee.

Because land and site work can be expensive in Rhode Island, build in room for septic, well, grading and any coastal permitting costs when you set your budget. Loans over $1 million (up to $2 million) require 5% down. Start with the eligibility guide and the closing costs guide. If you already own a lot, read about building on land you own.

Rhode Island VA construction loan FAQs