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Mortgage Loans Debt
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VA - Home Loan - Construction - 2007/05/08 18:59
Program Description
VA guarantees a percentage of the loan. This helps the veteran obtain a no-down payment mortgage at a competitive interest rate.
General Program Requirements
Persons who may qualify for VA guaranteed loans include
Veterans (including Reserve and National Guard members who were called to active duty)
Active duty service members
Current Reserve and Guard members (usually after 6 years of reserve service)
Certain surviving spouses
Commissioned Officers of the Public Health Service and National Oceanic and Atmospheric Administration are considered to be active duty members and veterans, once discharged.
Length-of-service requirements apply in most cases.
Veterans must have been discharged under conditions other than dishonorable.
You will need a valid Certificate of Eligibility (COE). You can get one from VA or from a lender using the Automated Certificate of Eligibility (ACE) program.
If you need to obtain your COE, contact a lender about obtaining your COE or download VA Form 26-1880, complete it and mail it (with proof of service) to our Winston-Salem Eligibility Center at:
VA Loan Eligibility Center
PO Box 20729
Winston-Salem, NC 27120
You can download the form at http://www.va.gov/vaforms/.
For overnight delivery:
VA Loan Eligibility Center
251 N. Main Street
Winston-Salem, NC 27155
Toll free number: 1-888-244-6711
E-mail: nceligib@vba.va.gov
Loan Terms
A loan to finance the construction/purchase of a residence is closed prior to the start of construction with proceeds disbursed to cover the cost of, or balance owed on, the land, and the balance into escrow. The escrowed monies are paid out to the builder during construction.
A veteran begins making payments on a construction/permanent home loan only after construction is complete. So, if the home takes six months to complete construction, the payment schedule for the veteran obtaining a 30-year mortgage must provide for full repayment of the loan in 29 years and six months.
On a construction/permanent home loan, the builder is responsible for:
interest payments during the construction period, and
all fees normally paid by a builder who obtains an interim construction loan including, but not limited to:
- inspection fees
- commitment fees
- title update fees, and
- hazard insurance.
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