construction
FHA & VA Construction-to-Permanent Loans
Build a new home with as little as 3.5% down (FHA) or zero down for eligible veterans (VA) — one loan, one closing, permanent financing locked before you break ground.
Eligibility
- FHA: down payments as low as 3.5% with flexible credit guidelines
- VA: up to 100% financing for eligible veterans and service members
- Existing land equity may count toward your down payment or closing costs
- Builder and project approval required before closing
Key benefits
- One application, one approval, one closing
- Permanent financing secured before construction begins
- VA option has no monthly mortgage insurance
- No second loan to requalify for once the home is finished
What is an FHA or VA construction-to-permanent loan?
An FHA or VA construction-to-permanent loan lets qualified borrowers finance building a new home and the permanent mortgage with a single loan and a single closing. These government-backed programs are designed to make new construction more accessible, with lower down payment requirements and more flexible qualification standards than many conventional construction loans.
Who it's for
The FHA option is well suited to first-time buyers and borrowers who want a low down payment and flexible credit guidelines. The VA option is for eligible veterans, active-duty service members, and certain surviving spouses who want to build with little to no money down and no monthly mortgage insurance.
How it works
Loan funds are disbursed to your builder in stages — known as draws — as construction milestones are completed and inspected. You typically make interest-only payments during the build. Once the home receives its certificate of occupancy, the loan automatically converts into a permanent FHA or VA mortgage, with no second closing.
Frequently asked
- What's the difference between the FHA and VA construction option?
- Both combine construction and your permanent mortgage into a single loan with one closing. The FHA option offers down payments as low as 3.5% with flexible credit guidelines. The VA option is for eligible veterans and service members and can offer up to 100% financing with no monthly mortgage insurance.
- Who qualifies for the VA construction loan?
- VA construction loans are available to eligible veterans, active-duty service members, reservists, National Guard members, and certain surviving spouses. We can help you confirm your eligibility.
- What happens when the home is finished?
- Funds are released to your builder in stages, called draws, as milestones are completed and inspected. Once the home receives its certificate of occupancy, the loan automatically converts into a permanent FHA or VA mortgage — no second closing required.