5 Best Construction Loans in Virginia


Are you looking to build or redesign your home in Virginia but not sure how to finance the project? Perhaps it is time to consider construction loans.

Virginia is officially recognized as a Commonwealth (one of four in the country) and is known as the home of Thomas Jefferson, one of the original 13 colonies and the resting place of many national heroes at Arlington National Cemetery. With over 8 million people, it’s also the 12th-most populous state in the country.

It’s no wonder that the rising costs of homes are making it difficult for many Virginians to own a home. The median sales price of a home in Virginia recently hit $390,000, according to the Virginia Realtors Association

Given the competitive real estate market, many borrowers are choosing to forgo time-consuming and expensive negotiations with sellers and instead opt to build their own home. The first step in either a renovation or new construction project is to find a home construction loan that can finance the project.

In the paragraphs below, we’ll go over the basics of getting a construction loan, the benefits and disadvantages, and also provide some options to help you find a loan officer that specializes in construction financing.

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Advantages and disadvantages of a construction loan in Virginia

A new construction loan in Virginia can be a great way to build your new home. There are many benefits to these types of loans, which are gaining in popularity in the market. Here are a few:

  • One benefit of a construction loan in Virginia is that you likely won’t have to make principal mortgage payments until the project is complete. Instead, you’re likely to only make interest payments during the construction period.
  • Another benefit of short-term construction loans in Virginia is that the loan can help you avoid paying private mortgage insurance (PMI). PMI can add up to thousands of dollars over the life of your loan.
  • A construction loan in Virginia will also help you finance the construction of your new home. You can use the loan to buy the land, hire a contractor, build the house, and pay the permits and fees.

Additionally, many people choose to pursue a construction loan because they want control over who builds the home and the ability to make customizations to their specifications. 

Some of the terms that you’ll typically find in a construction loan are:

  • Fixed-rate loan with construction term options
  • Refinance to a permanent loan
  • Timely plan disbursements and inspections
  • One-time, fixed rates loans of up to 30 years
  • One interest rate and one closing for one construction loan and land
  • Homeowner and self-build allowances

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5 Best construction loans in Virginia

1. Fulton Mortgage Company

Fulton Mortgage Company is a VA lender that specializes in mortgage loans and has extensive experience in construction loans specifically, although their upper loan limits may not work for some people in Virginia looking to build houses.

We spoke to a loan officer at Fulton Bank who specializes in construction loans and here’s what we learned about their construction and renovation loan options:

  • 10% Down Required (Owned Lot may be counted towards requirement)
  • Lot and Construction at the same time
  • One time close with rate modification at the end
  • Up to $1,500,000 at 80% Loan To Value
  • Up to $850,000 at 95% Loan To Value
  • Interest-only monthly payments during construction
  • 3/1, 5/1, 7/1, 10/1, and 15/1 ARMs
  • 80/10/10 is also available
  • Not Eligible for VA Construction Loan or FHA programs

If you’re interested in connecting directly with a loan officer at Fulton Bank that specializes in construction loans we can put you in touch with them directly.

2. TD Bank

TD Bank is one of the largest banks in the country with over $600 billion in assets, making it the sixth-largest by deposits in the United States. Not surprisingly, TD Bank has a robust construction loan product and should be one that you consider before making your ultimate decision.

We spoke to a TD Bank loan officer who personally closed over $300 million of mortgages last year to learn more about the TD Bank construction loan process. Here are the details:

  • 720-740 FICO score desired
  • 20% down required on loans up to 1.5M
  • 30% down required on loans up to 3M
  • One-time close
  • Primary or secondary homes are eligible
  • Fixed rate and ARMs are available
  • Purchased lot considered in the down payment
  • No pre-payment penalties
  • Interest rate locked before construction begins
  • If land has been owned for at least 6 months, we will lend up to 80% of the appraised value of the entire project.
  • If land has not been owned for at least 6 months, we will lend up to 80% of the land acquisition cost+cost of construction
  • No Condos or Co-Ops. No investment properties.

If you’re interested in connecting directly with a loan officer at TD Bank that specializes in construction loans, we can put you in touch with them directly.

3. Wintrust Mortgage

Wintrust Mortgage is one of the top 20 bank-owned retail mortgage originators in the country that originates in excess of $4 billion in loans annually in all 50 states. 

Recently we asked Wintrust Mortgage to provide us with details on their construction loan and this is what they said:

  • One-Time Closing. Only pay the closing cost once
  • Lock in your rate upfront and avoid interest rate risk
  • FHA (first time home buyer), VA home loan (Department of Veterans Affairs loan) with a certificate of eligibility (COE), and Conventional options
  • 0% Down up to $822,375 (VA ONLY)
  • 3.5% Down up to FHA County Limits ($356,362-822,375) 
  • 10% Down on Second homes
  • FICO 680+
  • Loans must include building no Lot/Land Loans 
  • Maximum of 10-acres per build site
  • Stick Built and Modular Homes ONLY
  • NO log homes or metal homes (barndominium)
  • Tear Down and Rebuilds do qualify
  • No self-build or owner builders. Must be an approved builder. 
  • Does Not allow ADUs (Accessory Dwelling Unit – Granny Flat/Garage Conversions/Basement)
  • Now lending in all 50 States

If you’re interested in connecting directly with a loan officer at Wintrust Mortgage that specializes in construction loans, we can put you in touch with them directly.

4. Citizens Bank

Citizens Bank is one the largest banks in the United States with over $160 billion in assets, making it the 13th largest retail bank in the United States. With a long history and so many assets, it’s not surprising that Citizens Bank offers a construction loan. The question is: does it stack up to the competition?

We contacted Citizens Bank to learn more about their construction loan product and here is what we found:

  • Construction-to-permanent program allows you to combine your construction or renovation financing and permanent mortgage into one loan.
  • One closing and one set of closing costs.
  • Include the purchase of your lot in the financing or build on a lot you already own.
  • Make interest-only payments during the construction phase.
  • You can lock in your permanent mortgage rate before construction begins.

If you’re interested in connecting directly with a loan officer at Citizens Bank that specializes in construction loans, we can put you in touch with them directly.

5. BMO Harris

BMO Harris is the 8th largest bank in North America by assets and provides financial services ranging from personal and commercial banking to wealth management and investment services. Among these many products, they also provide a construction loan for those looking to build or renovate a home.

We spoke directly with a loan officer at BMO Harris to learn more about their construction loan program and were able to get quite a lot of details. Here is what you need to know:

  • 700 Minimum credit score required
  • 10% down up to $1M loan amount (No PMI…720+ credit score required)
  • 20% down up to $2M loan amount
  • 30% down up to $3M loan amount
  • 35% down up to $4M loan amount
  • 40% down up to $5M loan amount
  • 45% down over $5M+ loan amount
  • 10% of the loan amount required for reserves
  • Primary residence and Second homes only (1 unit only)
  • Ground-up or tear-down construction utilizes Loans-to-Cost
  • Renovation utilizes As-Completed Value
  • 12-24 month construction periods are available 
  • 30/20/15/10 Fixed or ARM (5/6, 7/6 & 10/6) available
  • One-time closing automatically converts to permanent financing at the end of construction
  • Only 1 appraisal needed
  • 90 day lock same as 30 day pricing
  • Relationship rate discounts are available
  • Interest-only payments during construction
  • No prepayment penalty
  • No Spec or Investment Builds
  • No Builder Approval Required (must be licensed with General Liability coverage)
  • No owner builder
  • No Pre-starts
  • No Modular, Mobile for Manufactured homes

If you’re interested in connecting directly with a loan officer at BMO Harris that specializes in construction loans, we can put you in touch with them directly.

Does a construction loan in Virginia make sense for you?

A construction loan may be a good idea if you’re willing to put in the work to see the project from start to finish. Unlike homebuyers who are buying a pre-built home, building your dream home in Virginia is a much more complicated process than a home purchase that requires more attention and a team of people to help you.

To get preapproved for a construction loan, you’ll need to understand your current debt to income ratio, budget and type of property you want to build.

One of those team members needs to be a loan officer with experience financing, underwriting and seeing new builds through the completion process. In finding that loan officer, you’ll want to make sure that you are a good personality fit and that the loan officer’s bank has good rates, refinancing terms and fees as compared to the rest of the market.

If you’re looking to explore construction loans in other states, check out our national guide to construction loans and get started exploring all 50 states.

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Joshua Holt

Joshua Holt is a licensed mortgage loan originator (NMLS #2306824) and founder of Biglaw Investor. His mortgage expertise lies in the areas of professional mortgage loans, particularly for lawyers, doctors and other high-income professionals. Prior to Biglaw Investor, Josh practiced private equity mergers & acquisition law for one of the largest law firms in the country.

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