On other occasions, we’ve already mentioned the advantages that you can access through loan offers, but we’ve also told you about the circumstances in which you should apply for a loan, which requires a careful analysis of the emergency situation. It is on the basis of all this that you have been informed that we will once again be dealing with another option, this one a VA offer, aimed at real estate construction.
Interested in this specific approach? Then check out the complete guide below and find out how to apply for one if you meet the requirements. Read more.
What is the VA construction loan anyway?
As mentioned above, VA loans are specifically for building or renovating a home, and are an exclusive offer for veterans in America. Since it is an opportunity supported by the Department of Veterans Affairs itself, it is more reliable and secure, and even has better conditions when it comes to contracting it.
In addition, it is flexible and can be used for different opportunities, as long as they are related to your specific target, so you can use it to buy land, build a house from scratch, renovate, etc. What’s more, you can also take out a loan without the need for a down payment, which differs from more traditional loans. However, with regard to approval times, this can be a negative point, due to the delays they can cause because of the extra paperwork and all the minute details in the process. Generally, it can take around 60 days for your VA loan to be approved.
See also: Access NOW this loan opportunity offered by African Bank
The types of loan available for your VA building
Before you apply, it’s very important to understand that there are two types of loan available for the same purpose, which is to build your VA. Understanding them is therefore a crucial process.
- The VA construction-to-permanent loan: this opportunity is the most simplified in terms of its financing, combining two phases into one loan. In other words, it’s just a single set of paperwork, making the whole process simpler and much quicker and even cheaper;
- Construction-only VA loan: this, unlike the other, is divided into two closings, focused only on the construction phase of your property, so when the entire construction process is completed, you will need to separately guarantee your mortgage. Therefore, some payment costs will be added.
See also: A complete analysis of Sofi’s personal loan opportunity
What are the requirements to be considered
Before you apply, of course, you need to know whether you fall within the specific target audience of the opportunity. Therefore, some requirements need to be met:
- Have your COE or Certificate of Eligibility: to obtain this you can either apply online or visit a face-to-face VA office, submitting your form and thus proving your entitlement;
- You must also meet a minimum credit score, as most lenders make this a requirement. Therefore, it would be good for your score to be between 620+, but this can vary from lender to lender and from the financial institution you choose;
- DTI index of 41% or more, or less;
- Financing rate or mortgage insurance;
- Submission of detailed construction plans, plus builder’s evaluation and approval;
- VA property certification.
By doing these things you fit the basic criteria for the VA offer.
See also: Here’s how to apply for your Avant personal loan
How to apply
Now that you’ve seen what the VA opportunity is all about, as well as the basic requirements, it’s time to apply for your loan. However, before you do, you should always be aware of the seriousness of these contracts. NEVER take out a loan without first planning your payment or being sure of the emergency situation. Only apply for a loan through a bank when there are no other less compromising resources to be found. If this option is still right for you, here’s how to apply:
- The first step is to secure your COE;
- Once you have secured your COE and found your lender, your loan officer will advise you on which type of loan will suit you best;
- Next, they will analyze whether you meet all the criteria;
Finally, once your application has been finalized, your lender will carry out an appraisal of the property you want and you will then make all the necessary approvals.
Click here to request your COE ➜
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