If the DFW resale market has you frustrated — bidding wars, homes that need work, or just nothing that fits — building might be worth a look. Both VA and FHA offer one-time close construction loans that let eligible buyers finance the land, the build, and the permanent mortgage in a single loan, often with little or no down payment.
Quick Answer
• VA construction loan: Available to eligible veterans and service members with no down payment required in many cases, though it’s a niche product — not every lender offers it
• FHA construction loan: Available to a broader range of borrowers with as little as 3.5% down
• One-time close: Both close once, before construction starts — no separate construction loan and permanent mortgage, no re-qualifying after the build
How a One-Time Close Construction Loan Works
With a traditional “two-time close” approach, you’d get a short-term construction loan, then refinance into a permanent mortgage once the home is finished — two closings, two sets of closing costs, and a re-qualification in between. A one-time close construction loan combines all of that into a single closing that happens before the first shovel goes in the ground. Funds are released to your builder in stages (called draws) as construction milestones are completed, and once the home is finished, the loan simply converts to a standard mortgage — no second closing, no new approval.
VA Construction Loans: What to Know
• Down payment: Many eligible veterans and active-duty service members can build with no down payment, consistent with standard VA loan benefits
• Builder requirement: Your builder must register with the VA and obtain a VA Builder ID before construction can be financed this way
• Availability: True VA construction financing is less common than VA purchase loans — not every lender offers it, so it’s worth confirming current availability and requirements with us directly
• Appraisal: The VA reviews and appraises the construction plans themselves, in addition to the finished home, before the loan can close
FHA Construction Loans: What to Know
• Down payment: As little as 3.5% down for eligible borrowers, similar to a standard FHA purchase loan
• Credit flexibility: FHA guidelines are generally more forgiving on credit history than conventional construction financing, though lenders often apply their own minimum credit score for construction specifically
• During construction: No payments are typically due from you while the home is being built
• Debt-to-income: FHA’s more flexible debt-to-income guidelines can help borrowers who wouldn’t qualify under stricter construction-loan standards elsewhere
What You’ll Need to Get Started
1. A licensed, approved builder with experience completing VA or FHA construction files — not every builder is set up for this
2. Detailed construction plans, specifications, and a signed construction contract with a realistic timeline
3. A lot you already own or are purchasing as part of the loan
4. Standard income, credit, and asset documentation, just like any other mortgage application
Building in DFW: A Few Local Notes
Lot availability and builder timelines vary a lot across the DFW area right now, and construction loan approval is only half the equation — the builder’s track record and contract terms matter just as much. We work with borrowers early, often before a lot or builder is even finalized, so financing isn’t the thing holding up your plans.
FAQ
Can I use a VA or FHA construction loan for a custom home on my own lot?
Often, yes — both programs can finance construction on land you already own or are purchasing, as long as your builder and plans meet program requirements.
Do I need a down payment for a VA construction loan?
Many eligible veterans and service members can build with no down payment, though final terms depend on your entitlement, credit profile, and the lender’s specific construction guidelines.
What happens if construction costs more than expected?
This is exactly why a detailed contract and realistic budget matter upfront — we’ll walk through contingency planning with you before you sign anything with a builder.
No Pressure — Just Answers When You’re Ready
Thinking about building instead of buying? Let’s talk through whether a VA or FHA construction loan fits your plans — no pressure, just a clear picture of what’s possible.
Cristina Calk
Team Calk | Fairway Independent Mortgage Corporation
Phone: 817-929-6239
Website: TeamCalk.com
NMLS# 497446 (Cristina Calk) | Fairway Independent Mortgage Corporation, NMLS# 2289. Equal Housing Lender. Programs and eligibility requirements are subject to change without notice and are current as of the publish date of this article; contact us for current terms. This is not an offer to extend credit or a commitment to lend, and no interest rate or Annual Percentage Rate (APR) is quoted in this article unless explicitly labeled and sourced. Contact us for a personalized rate quote and Loan Estimate, which will disclose your actual interest rate, APR, estimated payment, and closing costs in compliance with the Truth in Lending Act (Regulation Z). This article is for informational purposes only and is not tax, legal, or financial planning advice.