Build a brand-new home in Tennessee using your VA benefit, with the land, the construction, and your permanent mortgage rolled into a single loan and a single closing. From the fast-growing communities around Fort Campbell and Clarksville to Murfreesboro, the Nashville suburbs, and Knoxville, you lock your terms once at the start instead of re-qualifying and paying a second set of closing costs after the house is finished.
100%Finance up to the appraised value of the finished home
One-TimeClosing covers the land and the build together
580Minimum credit score, when most lenders want 640 or higher
No Re-QualifyingUnlike a traditional construction loan that makes you re-qualify once the build is done
What is a VA one-time close construction loan?
A VA one-time close construction loan is a single loan that pays for the lot, the cost of building the home, and the permanent mortgage you keep once construction is done, all under one closing. It is sometimes called a single-close or construction-to-permanent loan, and it carries the same core VA benefits you would get buying an existing home, financing of up to 100% of the finished appraised value and no monthly mortgage insurance. The difference from a standard purchase is that the home does not exist yet, so the loan is built around your plans, your builder, and an appraisal based on what the finished home will be worth.
Because everything is set up at the very beginning, you sign once and your terms are locked in. During the build we release funds to your builder in stages as the work is completed, and when the home is finished the loan simply converts to your permanent VA mortgage, with no second closing and no need to re-qualify. Middle Tennessee is one of the faster-growing parts of the country, so for a lot of military families building a home is a realistic and popular path to ownership.
One-time close vs two-time close, why one closing matters
Many lenders only offer a two-time close, where you take a short-term construction loan to build, then refinance into a separate permanent loan once the home is done. That means two applications, two sets of closing costs, and a second trip through underwriting at whatever rates happen to be available months later. A VA one-time close avoids all of that.
Two-time close (the common way)
A construction loan first, then a separate refinance into your permanent mortgage after the home is built.
Two closings and two sets of costs
You re-qualify after construction
Your rate can move before you lock again
More moving parts to coordinate
VA one-time close
One loan and one closing for the land, the construction, and the permanent mortgage you keep for the life of the loan.
One closing, one set of costs
No re-qualifying after the build
Your terms are locked at the start
Finance up to 100% of the finished appraised value
What you can build in Tennessee
This loan is for Veterans and active-duty service members who would rather build the home that fits their family than settle for an existing home on the market. It has to be the home you intend to live in as your primary residence, and a few common Tennessee situations fit it well.
Build near your base
Put up a new home in the communities around Fort Campbell and Clarksville, Naval Support Activity Mid-South in Millington, McGhee Tyson outside Knoxville, or Arnold Air Force Base near Tullahoma, where building can beat competing for limited homes close to post.
Buy the lot and build together
If you have found land but not a house, the same loan can cover the lot purchase and the build, so you are not juggling a separate land loan on the side.
Build in a growing Tennessee market
Clarksville, Murfreesboro, the Nashville suburbs, and the Knoxville area are some of the fastest-growing communities in the state, so building is often the most realistic path to the home you want.
Get a home built to current code
A new build means newer systems, better energy efficiency, and construction that meets today’s building standards, which can keep your insurance and your utility bills more manageable for years.
How a VA one-time close construction loan works
The process has more pieces than a standard purchase because we are financing a home that is still being built, but we handle the VA side for you and keep it as simple as it can be.
01
Get pre-qualified and pick your builder
We pull your Certificate of Eligibility (COE) and look at your numbers, and you choose a licensed, insured builder who is registered with the VA to do the work.
02
Plans, specs, and the appraisal
Your builder provides the plans and a cost breakdown, and the home is appraised on what it will be worth once finished, which is what your financing is measured against.
03
One closing, then the build
You close a single time and your terms are set, then we release funds to the builder in draws as each stage of construction is completed and inspected.
04
The home finishes and converts
When the build is done, the loan converts to your permanent VA mortgage automatically, with no second closing, no new application, and no re-qualifying.
Estimate your Tennessee VA construction loan
This is the part most lenders hide. Put in your land cost, your builder’s bid, and the value the finished home is expected to appraise for, and the calculator breaks down the full loan for you, the 5% contingency, the construction interest reserve that covers your payments while you build, the VA funding fee, and how much you can finance versus bring to closing. These are estimates, so a dedicated VA specialist will confirm the real numbers for your file.
Tennessee VA Construction Loan Calculator
See how much you may qualify for and what it takes to finance a VA one-time close construction loan in Tennessee.
Why work with PBT Bancorp for your Tennessee build
A construction loan is more involved than a typical mortgage, so it helps to work with a team that has done a lot of them. Our team has decades of experience with Veterans and has helped over 3,000 families buy or build a home and refinance to save money, and we know how to keep a Tennessee VA build moving.
We are an FDIC member bank and a wholesale broker, and we work with the lenders who actually offer a true VA one-time close
A real VA one-time close is a specialty product that most lenders do not offer, so it helps to work with a team that does these regularly
We pull your Certificate of Eligibility (COE) and handle the VA paperwork and builder requirements for you
You work with a dedicated VA specialist from start to finish
Our VA one-time close program goes down to a 580 credit score, when most lenders want 640 or higher
Tennessee VA construction loan questions
Do you offer VA construction loans across Tennessee?
Yes, we work with build-ready Veterans and active-duty service members statewide, from Clarksville and the Fort Campbell area to Nashville, Murfreesboro, Knoxville, Chattanooga, the Tri-Cities, and Memphis, and we are licensed in all 50 states, so we can handle your build wherever you are putting down roots in Tennessee.
What credit score do I need for a VA construction loan?
The VA does not set a minimum credit score, and most lenders want stronger credit on a construction loan than on a standard purchase, often 640 or higher. Our VA one-time close program goes down to a 580 credit score, so we can often help Tennessee Veterans who would get turned away elsewhere, as long as the rest of your file fits.
How much do I need to put down on a VA construction loan?
A VA construction loan is based on the finished appraised value of your home, and in many cases you can finance up to that value, which can mean little or nothing down. Unlike a standard VA purchase, a construction loan can call for some money down depending on the lender and how your build cost compares to the appraised value, so we will go over exactly what to expect for your situation before you commit.
What if I already own the land?
Owning your lot can lower what you bring to closing, because the appraised value of the land can count toward the loan much like a down payment, and that can reduce the VA funding fee you owe at closing. We will look at your land value and factor it in when we put your numbers together.
Can I buy the land and build with the same loan?
Yes, in many cases the lot purchase can be rolled into the same VA construction loan as the build, so you are not carrying a separate land loan, though the details depend on your situation and the property.
When do my mortgage payments start?
You make no monthly mortgage payments while your home is being built, which can run up to about 11 months. The interest for the construction period is built right into your loan budget, so your first regular principal and interest payment is not due until the build is finished and the loan converts to your permanent VA mortgage.
What kinds of homes can I build?
Quite a few. Along with a standard site-built home, our VA one-time close can be used for modular and manufactured homes, a primary residence with up to four units, and even unique builds like a barndominium when the appraisal can support the value with comparable sales. Tell us what you have in mind and we will let you know quickly whether it works.
Does the VA funding fee apply to a construction loan?
Yes, the VA funding fee applies the same way it does on a VA purchase, and it is waived for Veterans with a 10% or greater service-connected disability, so we will confirm whether it applies to you before you commit to anything.
Ready to build your Tennessee home with your VA benefit?
Tell us about the home you want to build and we will look at your eligibility, your numbers, and what a one-time close would look like for you, with no pressure and no obligation. Give us a call at 800-697-4371 or start online and let us handle the VA side of your build.
