Citizens Financial: One-Time Close New Construction VA Loan

If you’re a veteran or currently serving in the military, buying a new home may seem like a daunting task. That’s why Citizens Financial has introduced a new loan product designed to help you with the purchase of a new construction home.

The Citizens Financial’s One-Time Close New Construction VA Loan, also known as OTC VA Loan, is a 30-year fixed or 30-year jumbo loan designed specifically for primary residences only. With a maximum loan amount of $4 million and a minimum FICO score requirement of 620, this loan can help those who serve acquire their dream homes.

One of the biggest benefits of the OTC VA Loan is that it allows for a 100% LTV/CLTV/HCLTV ratio. This means that borrowers can finance the total acquisition cost of the new construction home, including the funding fee, without having to worry about coming up with a large down payment. However, it’s important to note that borrowers cannot combine VA entitlement.

Another unique aspect of the OTC VA Loan is that it cannot be used for rehab constructions. This means that an existing property cannot be renovated using a One-Time Close New Construction VA loan. Additionally, an escrow waiver is required during the construction period, meaning that no payments are required during this time as interest-only payments will be included in the construction budget.

Once the construction period is complete and the modification to permanent financing has been completed, borrowers will begin paying principal and interest payments. The loan term begins at the note date, and the construction period is “backed out” of the loan term. For example, if a 30-year term loan has an 11-month build, the loan will convert to a 29-year and 1-month permanent financing loan.

Overall, the Citizens Financial’s One-Time Close New Construction VA Loan is an excellent option for those who serve and are looking to purchase a new construction home. With its high loan amount limit, 100% LTV/CLTV/HCLTV ratio, and unique construction period, it’s definitely worth considering if you’re in the market for a new home.