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Using a VA Loan to Buy a Newly-Built Home

You can use your VA loan benefit for a variety of property types. Here we will get into how to purchase a newly built home with a VA loan, and how to get the best deal.

new construction home using a va loan
new construction home using a va loan

There’s nothing quite like moving into a brand-new house. Using your VA home loan benefit to purchase a newly-built home can be an exciting milestone, but there are a few things you should know before beginning the process. Understanding what VA lenders will want to see at your new home can help ensure you don’t run into any major roadblocks along the way.

Can You Buy a Newly-Built Home with a VA Loan?

Yes, purchasing a new build with a VA home loan is possible. You’ll have a smoother process if the home has already finished construction, but it is still possible to buy a home that’s under construction with a VA loan.

Looking to finance a property that hasn’t started the construction process yet? Check out our guide on how to build a home with a VA loan.

What VA Lenders Will Look for in a Newly-Built Home

Getting a VA loan for construction that has not yet begun can be especially difficult. The key to making this work is bringing the benefits of VA loans into the process at the right time. If a home is nearing completion, you may have an easier time securing a VA loan with a lender.

This is because lenders want to ensure the newly-built home meets the minimum property requirements, and it’s typically easier for an appraiser to evaluate that when the home is in its final stages of construction. The VA wants to verify that homes are safe, secure and sanitary before backing them. Many crucial structures should be completed when homes are nearing completion.

A benefit to having an appraiser come look at the property at the final stage of construction is that they will be able to identify any issues with the electric, heating and cooling systems during their investigation. There are a lot of moving pieces with new home builds, so it’s not uncommon for a home to have an issue in one of these areas. In cases where there are issues, you can go to your builder and have them fix the problem before they finish their job.

How to Find the Best Deal on a New Build

Now that we’ve established what VA lenders will want to see, let’s break down how to get the best deal on your newly-built home.

1. Look for Nearly-Finished Homes

Looking for homes that are almost finished with construction is a good way to find a deal. These homes are likely available because of a fallout between the previous buyer and the builder, leaving the builder to scramble to find a new buyer. In this case, offering the home at a slightly lower price is better than sitting on the new build for months on end. This will be heavily dependent on the current market, but it can be a good place to start.

2. Explore Near-Completed Developments

Another option is to drive through your desired development and look for homes nearing completion. Generally, the last homes to sell in a new neighborhood are often the cheapest. You’ll also have a full idea of how the neighborhood looks before moving in, not to mention no noisy construction next door.

3. Work with an Experienced Real Estate Agent

One of the best resources for finding deals on newly-built houses is your local real estate agent. They’ll know the area and local builders better than anyone else. You also won't find severely marked-down homes with online searches, because builders don't want to risk upsetting other buyers who paid full price. Working with a real estate agent who is familiar with the VA loan process can also help ensure you have a smooth homebuying journey.

Get a quote for a $0 Down VA Home Loan and start your path to homeownership with a trusted VA lender.

4. Make Sure You Research the Builder

Do a background check on the building company before you commit. Reading reviews previous customers have left on the builder is a great way to identify any red flags. Walk around and talk to the people that live in the neighborhood you're looking at. They'll give you the inside scoop on how reliable, trustworthy, and willing to negotiate the builder is.

It’d also be wise to speak with homeowners who have lived in their homes for at least a year and ask them how their property has held up. Many homes may look great the day you move in, but months down the road begin showing issues. The last thing you want to deal with is costly home repairs a few months after closing.

At the end of the day, buying a newly-built home with a VA loan is very possible. But coming to the table equipped with knowledge about what the new build needs will make your homebuying journey that much easier.

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