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US Marine CorpsFor the brave men and women of our nation’s military, building a custom home in Northern Colorado could be possible with a VA Construction Loan. Since their introduction in 1944, VA home loans have helped countless people buy homes without many of the typical requirements of conventional home loans. While VA home loans help people to purchase existing homes, there are many others who dream of building a custom home. With a VA construction loan that dream can become a reality.

Veteran-Certified Builder In Fort Collins

NoCO Custom Homes is a custom homebuilder serving Northern Colorado with strong ties to the military community. Owner Jason Jones served six years in the Marine Corps, including two deployments in Iraq. As a Marine, Jason served his country with the core values of honor, courage, and commitment. As a Veteran-Certified builder, Jason continues to serve with the same dedication, discipline, and values.

NoCO Custom Homes is also proud to be a building partner of Homes For Our Troops, an organization that builds mortgage-free, specially adapted homes across the country for severely injured Veterans. In 2015, NoCO Custom Homes had the distinct honor of building a home in Windsor uniquely designed to fit the needs of Marine Corporal Jason Hallett.

Together with his wife Dani, Jason welcomes opportunities to help fellow Marines and members of all branches of the military build the custom home of their dreams through a conventional home building process or the possibility of a VA construction loan.

About VA Construction Loans

A VA home loan is a mortgage option available only to veterans, active duty service members, and widowed military spouses. VA loans are issued by private lenders just as a conventional home loan would be, however a portion of the loan is guaranteed by the Department of Veteran’s Affairs. VA loans provide unique advantages such as no down payment or mortgage insurance requirements.

Likewise, VA construction loans make it possible for qualified military borrowers to use their VA loan entitlements for the construction of a new custom home. However, obtaining a construction loan can be more difficult. The VA must approve both the lender and builder in order to qualify. Borrowers may also be required to provide a down payment and there will likely be additional terms and conditions for the loan.

With a VA construction loan, borrowers can borrow the money needed for both the construction of the home as well as the mortgage once the home is completed. Typically, the lender first provides funds for the construction phase of the process. At the time of closing, they may only release money needed to purchase land, but funds are then released as construction milestones are met. Once construction is completed, the loan can then be transitioned into a residential mortgage loan.

There are two types of construction loans – one in which there are two closing dates requiring individual loan applications (one for the construction phase and one for the mortgage) and another where there is a single closing date and application for both phases. The type of loan that is available to you will depend on the lender and their individual qualifications.

An alternative is to find a lender that will assist veterans and military members with a variation of the construction loan in which construction is first financed by the homeowner (either through the builder or a conventional construction loan) and the loan is then refinanced into a VA home loan. This may be a more plausible option for those struggling to find an approved lender for VA construction loans.

What Are The Requirements Of Construction Loan?

While the process may sound simple enough, many lenders consider construction loans as a higher risk investment and will have more requirements and guidelines in place. Things to know to build a home using a VA construction loan include:

  • Borrowers must acquire a Certificate of Enrollment from the VA
  • Builders must be licensed, insured and willing to become an approved builder (NoCO Custom Homes is licensed, insured, and more than willing)
  • Builders will be required to take on greater responsibility on the loan, so be sure that all parties have a detailed understanding of financial requirements
  • Complete plans and specs must be submitted by the borrower and builder at the time of application
  • Homes must common in size and design, while land should not be larger than what is considered standard and customary for the area. VA appraisals on both are required to complete the process.
  • Borrowers may be required to provide a down payment
  • VA Home Loan requirements will still apply. Click here to read more about these.

Although the requirements may be greater, the benefit of a custom-built home is well worth the process. NoCO Custom Homes is willing to go through the process of applying for a VA construction loan alongside veterans, active duty members, and widowed spouses of all military branches. Call us today at (970) 581-0481 to learn more about our process and take the first steps towards building your dream home.

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