Home construction is one of the most thrilling accomplishments in an individual’s or a couple’s life, especially for disabled veterans, service members currently serving on active duty, and eligible surviving spouses. In the land-rich and style-diverse state of Texas, where the architectural landscape ranges from traditional ranch to sleek modern designs, plenty of veterans hope to build a custom home that embodies their lifestyle. Now, with the VA One-Time Close Construction Loan, you can skip the prequalifying process and the second closing.

This guide will provide you with all the information you need to know about building a modern home in Texas with a VA One-Time Close (OTC) Construction Loan, including eligibility, benefits, requirements, the loan application process, and why Texas is the perfect location to make your dream home a reality.

What Is a VA One-Time Close Construction Loan?

The VA One-Time Close Construction Loan is similar to a traditional VA loan for new home construction but it also includes the ability for veterans to make the purchase of the home, rather than a stand-alone construction loan to cover the home and it’s land the property is being built on. And while “normal” construction loans require two separate loans (and two separate closings), one for the construction and one for the post-construction mortgage, a VA OTC is a one-time close transaction.

Key Features:

• Single closing: You’ll only need to pay closing costs once, which could save you time and money.
• No down payment: Qualified veterans can finance up to 100% of house construction costs, design costs or the purchase price of the home.
• Fixed-rate loan: Your interest rate, and, therefore, your monthly payment will never change.
• How You Use the Money Can purchase land (if not yet owned), build on property or be used to pay off existing mortgage.

This loan is particularly advantageous for aspiring homeowners that are interested in a custom home, because construction trends in Texas tend to lean toward energy-efficient homes, contemporary designs and smart homes.

Why Build a Modern Home in Texas?

Notably, Texas is one of the fastest growing states in the U.S., and draws all ages of families, professionals and retirees. Military families are attracted to the state because it’s friendly to the military and has a lot to offer with VA resources and a lower-than-average cost of land compared to most states.

Here’s why Texas is a dream location for a modern home build:

1. Affordable Land and Diverse Locations

• From the Hill Country outside of Austin to open spaces outside Houston or Dallas, Texas has a setting for all lifestyles.

• Large cities aside, there are still many places where a plot of land comes affordable, allowing one to find the ideal location for a custom home.

2. Modern Architectural Trends

• Texas homebuilders have been embracing modern architecture (with open, clean lines); open floor plans (to break down barriers between the family room, dining room and kitchen); floor-to-ceiling windows (to let in natural light and wide-open views); eco-friendly materials (from reclaimed wood to sustainable siding); and smart-home technology.

• It is a “one time close” because it is “closed” at the beginning, rather than the end of the construction process as with a traditional home loan. Design options and features are discussed and decided upon, so it’s possible to have the latest trends and features from the start and not think about or look at a resale home.

3. Vibrant Job Market and Quality of Life

• With its booming economy, no state income tax and support services for veterans, Texas provides long-term benefits for military families who want to establish their roots.

4. Veteran-Friendly State

• Some of the largest military bases in the country are in Texas, including Fort Hood and Joint Base San Antonio.

• Veterans can also buy and build homes with the help of state-level programs, in addition to VA benefits.

Benefits of Using a VA OTC Loan for a Modern Texas Home

Getting a VA One-Time Close Construction Loan has a variety of benefits:

• No Down Payment: Most construction loans traditionally back 10–20% down. You can use VA loans to finance the entire project.
• No PMI: You can save even more by not having to pay PMI, which can potentially add hundreds of dollars onto your payment each month.
• Locked Interest Rates: Your rate isn’t affected during the building process, which runs 6-12 months.
• Covers Land + Construction: You can use a construction loan to buy land, but not to purchase the land and build on it.
• One Closing, One Loan: Offers a simplified financing process with less stress and paperwork.

These advantages are especially useful when building a modern house, where custom features (such as solar panels, smart appliances or a unique design) might come with extra upfront costs.

Eligibility for a VA One-Time Close Construction Loan

Standard VA loan eligibility applies to a VA jumbo loan:

• Be a veteran, active duty, and in some cases an eligible surviving spouse.
• Get a COE from the Department of Veterans Affairs.
• Satisfy lender credit and income requirements (usually a credit score of 620, but sometimes lenders may allow a lower score).
• The home must be your primary residence (as opposed to an investment or vacation property).

And the builder you use must be VA-approved. Because many Texas builders already know what the V.A. wants, the system is smoother.

Step-by-Step Process of Building a Modern Home with a VA OTC Loan

1. Get Pre-Qualified

Begin by checking your credit score, your qualifications, and your borrowing ability by contacting a VA construction loan lender in Texas.

2. Obtain Your Certificate of Eligibility

If you don’t already have one, your lender can assist you with obtaining your COE from the VA.

3. Choose Your Land

• If you already own land, that can be included in the loan.
• If not, that gives you something to bring to the table and you can get the home and the land together as part of a construction loan.

4. Select a VA-Approved Builder

This is a crucial step. The builder must:

• Be registered with the VA.
• Have proper insurance and licensing.
• Please give construction details of the works and cost estimates.

5. Loan Approval and Closing

Your lender approves the project, reviews the builder’s plans and arranges the final single closing.

6. Construction Phase

The lender releases funds to the builder in intervals (known as “draws”) as the work is completed. Typical stages are ground works, framing, roofs, and finishing stages.

7. Move-In and Permanent Mortgage

After the home is built, the construction loan converts to a VA mortgage. You just move in and begin making those regular monthly payments.

Design Considerations for a Modern Texas Home

When you build with a VA One-Time Close loan, you can create your home to your specifications. Some of the trending features for Texas homes today are:

• Open Concept Living: Broad, time-saving floor plans with little to no walls.
• Energy Efficiency: Solar panels, tankless water heaters and energy-efficient insulation.
• Home breakthrough Technology: Smart-home security, lighting and HVAC by smartphone.
• Outdoor Living Areas: Covered porches, outdoor kitchens & pools.
• Sustainability Materials: Regional woods, recycled steel, eco-friendly flooring.

Challenges to Be Aware Of

VA OTC loans are fantastic but there are some things to think about:

• Few Lenders Offer: Few lenders even offer VA construction loans. You will have to find a specialized lender in Texas.
• Builder Approval Process: If your builder isn’t VA-approved, you may need to walk them through the approval process because many builders don’t know that they need to be on the VA-approved list.
• Appraisal Process: VA appraisers will review your building plans to ensure that the home complies with VA requirements.

Why Texas Veterans Should Consider This Path

Constructing a new home in Texas on a VA One-Time Close Construction Loan enables you to design your own home to fit your life style, which are not possible with a construction loans by a lot of lenders. Whether it’s a cool, energy-efficient house in Dallas, a family getaway outside of San Antonio, or a minimalist ranch house in the Hill Country, this loan is making it affordable.

Final Thoughts

Texas is just the right combination of inexpensive land, accommodating communities and 21st century home building for vets and service families. With a VA One-Time Close Construction Loan, the wait period for funding to get the home you want or the home of your dreams is less than a traditional construction loan.

If you’re prepared to start the process of constructing your dream home in Texas, a reliable VA construction loan lender can assist you with this process. The modern home of your dreams is not a dream, but a reality.