You may have heard that VA construction loans can be challenging to find. Many VA lenders do not offer them.
VA construction loans are available to qualified veterans and active-duty service members. Pay for home construction costs. Borrowers can often build their dream homes with little money down.
Despite this, not everyone can benefit from a VA construction loan. A VA home purchase loan is more straightforward for many military personnel.
Read More: Alternatives To Construction Loans
Compare personalized rates from multiple lenders to get a quote. Begin here (Dec 5, 2022).
What’s a VA Construction Loan?
You can buy land and build your home with one loan through VA construction.
The traditional construction loan consists of three loans that cover the following:
- Land acquisition costs – The first loan is to purchase the land you will build.
- Home construction costs – The second pays construction costs in stages as your home builds.
- Permanent loan – This third loan is used to repay the two previous short-term loans. It then acts as a long-term mortgage loan for your home with monthly mortgage payments.
A VA construction loan is a single loan that can replace three loans. Purchase the land or pay the construction costs in stages as your contractor progresses.
Once your home is completed, you won’t need a new mortgage. Your VA loan is already in effect.
It is a beautiful idea. It’s a great idea if you can find one.
How do I get a VA loan for a new construction project?
You must qualify for the VA loan program to use a VA home loan for new construction.
VA loan benefits are available to most active duty, retired, and honorably discharged service personnel.
Before you proceed to the next step, make sure you check the eligibility requirements.
Step 1: Locate a lender offering VA construction loans.
The U.S. Department of Veterans Affairs doesn’t lend money to homebuilders or homebuyers. Instead, the U.S. Department of Veterans Affairs authorizes private lenders to provide VA-insured loans for eligible vets.
Many VA mortgage lenders are available to homebuyers, but finding a lender to provide a VA construction loan takes time and effort.
Below is a listing of mortgage companies offering construction loans.
Editor’s note: These companies are not affiliated with us, and we have not evaluated them. Before contacting anyone, do your research.
- Wholesale: American Financial Resources can be used as a wholesale lender, meaning you cannot borrow directly from them. You will need to find a wholesale mortgage company using this wholesaler. AFR Wholesale claims it can provide 100% financing for construction loans. It requires a minimum of 620 credit score, and there are no monthly payments during construction.
- Security America Mortgage: The Texas-based lender offers 100% financing with no monthly payments.
- VA Nationwide Home Loans: These are divisions of Magnolia Bank. These loans are 100% financing, with a minimum credit score of 620, and fund the construction phase.
These are your choices.
Step 2: Get your Certificate Of Eligibility
You will need your Certificate of Eligibility (from the Department of Veterans Affairs) to be eligible for any VA loan, including the VA construction loan. This document proves that you are eligible for VA home loan benefits.
You can apply to a COE or ask your loan officer for assistance.
Step 3: Get preapproved for your price range
Pre-approval could be a rehearsal for your loan application. You can be preapproved by a VA-authorized loan lender and apply for the actual loan.
Pre-approval is similar to a loan application. It will consider your debt-to-income ratio, credit score, income stability, and down payment amount if you choose one.
Pre-approval will give you an advantage when applying for a mortgage. It will show you how much money you can borrow and your monthly mortgage payments and mortgage rate. It will also show your builder that you can afford the construction costs.
Step 4: Locate a VA-approved homebuilder
Once approved for a VA construction loan, it is time to start looking for your home’s builder. The Department of Veterans Affairs must approve the builder.
This form allows you to search for builders near you. To ensure you work with someone you can trust and who communicates well, speak to at least three builders. You should ensure that the builder is familiar with the type and style of home you want.
The VA will not allow you to complete the work even if you are a licensed contractor, home builder, or architect.
Your builder will need to assume more financial responsibility with the VA program. Additionally, they will need to provide a warranty. Before you spend too much time talking to builders, ensure they understand what you are getting. It’s best to give them the VA’s short overview of what’s involved.
Step 5: Get the OK of an appraiser.
Now that you have both a lender and a builder in mind, it is time to start sketching out your ideas. Before you can get the loan approved, make sure you have your plans in order.
Your loan officer should contact the appraiser to plan the appraisal process. The appraiser cannot simply visit the home and take notes since the house has yet to be available. The appraiser will need to determine the projected value of the home based on its plans.
You may need to revise plans if the appraiser believes your home is not worth the construction costs. You may also find a better lot, as the location impacts real estate value.
Step 6: Close your loan and get started building
You can apply for a loan by getting the VA approval for your builder and building plans.
The loan underwriting process can take anywhere from four to six weeks. The lender will not issue a lump sum of cash as with a purchase loan once the loan is closed. Instead, the lender will distribute funds slowly according to your draw schedule.
Fast loans mean that the builder can use the money as necessary.
Step 7: Get your VA-approved home completed.
After completing your home, the VA will inspect it again to ensure it meets the minimum property requirements. Your home should pass inspection easily because it is brand new. It assumes that the builder adhered to local building codes.
The VA has approved the construction.
VA construction loan requirements
You must be a qualified borrower to get a VA construction loan. Your builder and project must also meet the VA requirements.
Whether you are a veteran or active-duty military servicemember with a Certificate of Eligibility, it won’t take too long to meet the VA’s requirements.
The VA doesn’t have any strict underwriting requirements. However, VA lenders can have a higher standard. For construction loans, most VA lenders require credit scores of at least 640.
Your lender will use your debt-to-income ratio to determine your construction loan amount. Lenders prefer a balance between 41% and 51%.
Depending upon your entitlement, you will also need to pay an upfront VA funding fee, ranging from 2.3% to 3.6%. The price is lower for first-time borrowers. However, this is a significant expense in your loan amount. It also means you don’t need private mortgage Insurance (PMI).
Builders on VA-financed construction projects are more accountable than those financed with conventional loans. Builders are responsible for closing costs. However, they may be able to negotiate these into your building expenses.
The VA maintains a list of approved contractors. There are many options, as the list is extensive in many areas. If you need to be connected with VA-approved builders, your loan officer can help.
You will likely need a conventional loan if you want to work with a non-VA builder.
The Department of Veterans Affairs covers only home loans for primary residences. The government agency wants home finances to be safe, affordable, and well-suited for their residents.
The VA will assign an appraiser to review your plans and help you reach this goal. If an appraiser determines your home is not worth the construction cost, you must amend your plans.
The appraiser will verify that the property meets the VA’s Minimum Properties Requirements.
Is it challenging to obtain a VA construction loan?
Lenders are required to accept greater risk when lending construction loans. It makes them more challenging to obtain.
Lenders are more cautious with these loans because the house you’re financing isn’t yet available. A purchase loan allows the lender to recoup losses by selling your home if you default.
Construction loans are only available once your home is completed. If you are applying for a construction loan, expect the loan officer to ask only a few questions. Don’t be surprised if they want to see a higher credit score than traditional VA mortgages.
The VA will only guarantee a portion of your VA construction loan. Private lenders are what you’re borrowing. Private lenders have the right to establish their standards and requirements above and beyond those of the VA.
A VA construction loan is still more accessible than a conventional loan. Finding a lender that offers a VA loan is the most challenging part for some borrowers.
VA construction loan vs. traditional construction loan
A VA construction loan is available to veterans eligible for a VA loan. It does not require any collateral. You can borrow money without:
- You may need an initial down payment if you have a VA loan.
- Private Mortgage Insurance (PMI) – To avoid conventional mortgage insurance, you’d need 20% down. No matter how large your down payment, USDA and FHA loans will require mortgage insurance. VA loans only require the upfront VA funding fee.
- VA loan limits – You can borrow as much as your lender approves. There is no limit to the VA’s loan size.
- Geographical requirements – Unlike USDA loans, VA loans work in all parts of the U.S.
- Income requirements – Unlike USDA loans, you can still use your VA loan benefits, regardless of how much you earn.
This deal is not available with conventional loans.
What’s the deal with the VA construction loan, you ask? These loans are difficult to find as only a few VA lenders offer them.
You may need to look for another type of loan if you are still looking for a lender who will also underwrite VA construction loans.
Alternatives to a VA Construction Loan
If you are having trouble finding a lender who offers VA construction loans, there may be other options.
Conventional loans are the obvious choice. For construction costs and buying land, you may require separate loans. A significant down payment will likely be necessary for one or both loans.
Another option is to obtain a “one-time close mortgage” backed by Federal Housing Administration (FHA). It is similar to a VA construction loan.
There are some drawbacks.
- FHA requires that a minimum down payment of 3.5% be made on the loan amount
- After you pay your mortgage, you will have to pay monthly mortgage insurance.
You can refinance an FHA loan to a VA loan as soon as the home is finished. You can also refinance 100% to get your FHA down payment back.
For general inquiries:
* Email: firstname.lastname@example.org
* Phone: +1 (571) 544-6600
1 Facebook Marketplace Scam Venmo Frenzy: Don’t Let Turn Your Dream Deal into a Disaster
Your Essential Guide to: amazon Courtesy Credits and Hidden Savings
On occasion, you may have noticed that your Amazon statement had an extra entry, something that was applied automatically—without your knowledge—but nevertheless lowered the total price of your order. Hey, that’s free money, right? What should I worry about? The statement is labeled “Amazon Courtesy Credit $XX,” or you will see “Amazon Courtesy Credit Applied” with your payment statement. Think of Amazon Courtesy Credit as Amazon saying, “We’re sorry” or “Thank you.”
What is Amazon Courtesy Credit?
Amazon Courtesy Credit appears to be nothing more than exactly what it advertises: credit. Like receiving a large monetary tip for your service or an apology for a situation going sour, but not a cash reward. Once you’ve placed an order with Amazon, it’s applied, usually saying “credit applied,” after you’ve checked out.
You see, Amazon Complimentary Credit is used at Amazon’s discretion, with no clear rules applying—at least, none that are known to the customer. Amazon may throw you a bone because you order something from Amazon only to have it shipped a day or two after you place the order, making the delivery date much later than promised. In some cases, new Amazon Prime users got a complimentary credit from Amazon for signing up for Amazon Prime for the first time. In other rare cases, users were rewarded with Amazon Complimentary Credit for simply preparing to cancel Prime, only to, at the last minute, decide otherwise.
Where do you get Amazon Courtesy Credit?
Well, for the most part, it seems like Amazon Courtesy Credit is mostly earned through a bad order rather than Amazon being nice. After all, Amazon is worth over $950 billion (as of this writing), and it’s doubtful Amazon would reach that figure if they handed out Amazon Complimentary Credit every time you do business with them. That eats up your income.
However, the biggest difference that separates Amazon Complimentary Credit from, say, an Amazon gift card or an Amazon promo code is that the credit is applied automatically. You don’t decide when to use it, which seems pretty silly. It’s like being given a very tasty piece of gum, only it turns bitter after a few seconds. And that is not the only limitation.
How does Amazon credit work?
These credits are automatically applied to your account after your item ships. You’ll get an email notification when the credit has been applied to your account. They can usually only be used on digital products such as ebooks, music, movies, or apps.
How long does Amazon credit last?
- Click Proceed to Checkout after you’ve reviewed the items in your shopping cart. …
- Select your shipping address, and choose a shipping method.
- Select payment method by checking the box next to Use your X.
- Review your order details.
- Click Place your order.
Although there are some limitations to Amazon Courtesy Credit, it’s a nice little bonus after a bad order has left a sour taste in your mouth. Soften the blow, and you actually end up winning because a bad order is typically replaced by Amazon at no cost anyway, and then a little credit is added on top of the inconvenience.
Use best Donut Machines Can Boost Your Shop Efficiency and benefits
By improving earnings, raising revenues, and streamlining production, donut-making machines can completely transform your donut shop. Purchasing a donut machine has the potential to change your donut business by increasing productivity, improving product quality, and ultimately increasing earnings.
Quick Dough Dispensing:
When compared to manual methods, donut machines can dispense dough consistently and quickly, saving an important amount of preparation time.
Some donut-making machines can cook donuts in just one to two minutes, which enables you to efficiently meet peak demand and serve buyers faster.
This method is perfect for catering or busy times when machines can cook a lot of donuts at once.
Lower Labor Costs
By automating routine jobs, machines free up staff to concentrate on customer service and other business-related activities.
Every time, uniform dough thickness and cooking temperature are maintained thanks to machines, producing always tasty donuts.
Complete control over the cooking and provision of dough saves waste and saves supplies.
Quicker manufacturing times and constant quality result in happier consumers and quicker customer support, which may boost sales.
Lower functional costs:
Higher profit margins and lower operational expenses are a result of efficient ingredient utilization and decreased labor costs.
More product options:
You may broaden your menu and draw in more customers by using certain equipment that gives you the freedom to make donuts in a variety of shapes and sizes.
Types of donut-making machines:
Mini Donut Machines:
If you wish to sell mini donuts as a niche item or for small businesses, these portable machines are ideal. They can usually make 7–12 donuts in a batch using a non-stick pan.
Automatic donut-making machines
For large-scale production, these more substantial pieces of equipment are perfect. Everything is automated, including the cooking and frying as well as the dispensing of the dough. Some even have functions that allow you to dispense glaze and frosting.
Donut machines with continuous chains
These devices are incredibly productive and have an hourly capacity to make hundreds of donuts. These are perfect for large bakeries or donut shops.
Further Things to Think About:
Cost of a donut machine:
The price of donut-making machines changes according to brand, size, and features.
Select a machine that can meet your needs by taking your expected demand into account.
Simpleness of Use: Some devices are easier to operate than others. Select one that is simple to use and manage for your staff members.
Cleaning and maintenance of the donut-making machine:
To minimize downtime and improve the machine’s life, make sure it is simple to clean and maintain.
Advantages of a Donut Machine:
Increased Food Safety:
By removing the possibility of human error and pollution during the handling and heating of dough, machines improve the safety of food and lower the danger of illness caused by food.
By managing routine tasks and heavy dough lifting, donut machines can relieve the stress on staff. An atmosphere that is more positive and cozy may result from this.
Some doughnut machines have features that allow for more menu diversity and meet a range of client tastes, such as adjustable dough thickness, different cooking temperatures, and different shapes and sizes.
To sum up:
- Automating the donut-machine process lowers labor expenses while increasing quality and effectiveness. Although they come with a few limitations on flexibility and creativity and demand an important initial investment, they offer better food safety, increased manufacturing capacity, and diversity. You can decide if a donut machine is ideal for your business by comparing the benefits and disadvantages.
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