Building a home from the ground up is exciting, especially when you can use your VA benefit to do it. Construction financing is different from a typical purchase loan, and in North Carolina, getting the structure right from the start goes a long way toward keeping the build moving smoothly.
In Part 1 of our VA Construction series, we’ll cover the essentials for North Carolina buyers (including those building across the Triad):
what a VA construction loan is, who it’s for, the high-level difference between One-Time Close and Two-Time Close, and the big-picture timeline you can expect as your build gets underway.
What Is a VA Construction Loan (and Who Is It For)?
A VA construction loan allows eligible VA borrowers to finance the construction of a new primary residence using their VA benefit, rather than purchasing an existing home.
This option is typically a fit if you:
- Want to build a primary residence (not an investment property)
- Have already found land, or are still deciding how land will be handled in the financing
- Want one plan for the whole project (land + construction + long-term mortgage), depending on the structure you choose
- Prefer guidance from a team that understands the moving parts: builder paperwork, plans/specs, budgets, draw schedules, and inspections
Across the Triad—Winston-Salem, Clemmons, Lewisville, Kernersville, High Point, and Greensboro—we see many VA buyers choose construction because it gives them more control over layout, finishes, and function from day one.
One-Time Close vs. Two-Time Close: What's the Difference?
One of the first decisions you’ll make is whether your construction loan is structured with one closing or two.
One-Time Close (OTC): One Loan, One Closing
A One-Time Close (sometimes called “single close”) combines the construction phase and the permanent mortgage into one loan with one closing. Depending on the program, that can mean:
- One set of closing costs
- A more streamlined process since you are not completing a second closing later
- Financing that is set up upfront for both construction and the long-term mortgage
During construction, funds are typically released in stages as work is completed (draws), and payments are often based on the amount drawn.
Two-Time Close (TTC): Two Loans, Two Closings
A One-Time Close (sometimes called “single close”) combines the construction phase and the permanent mortgage into one loan with one closing. Depending on the program, that can mean:
- One set of closing costs
- A more streamlined process since you are not completing a second closing later
- Financing that is set up upfront for both construction and the long-term mortgage
During construction, funds are typically released in stages as work is completed (draws), and payments are often based on the amount drawn.
A Two-Time Close uses two separate closings: one for the construction loan and a second closing later for the permanent mortgage once the home is complete. At a high level, that can mean:
- Two sets of closing costs/fees
- A second approval step tied to the permanent mortgage
- More sensitivity to changes in credit, income, or debt between the first and second closing
Which option is right?
There is no one-size-fits-all answer. The best structure depends on your build plans, your timeline, and the specific guidelines for the loan program and project. We’ll help you compare the options and choose the structure that fits your situation.
The Big-Picture Timeline: What to Expect (Start to Finish)
Construction loans can feel complicated until you see the full picture. Here’s the high-level timeline we walk through with VA construction buyers in North Carolina.
- Early Planning and Pre-Qualification
This is where we look at the basics. We’ll start by reviewing VA eligibility basics, your budget range, and your target timeline. Then we’ll talk through the moving parts that are unique to a construction loan. - Choose Your Builder (and Align the Plan)
Construction financing requires more upfront detail than a standard purchase. Once you select a builder, you’ll align on the core items the loan will be built around:
- Plans and specifications
- Budget
- Construction timeline
- Contract terms - Land: How it Fits into Your Construction Loan
Some buyers already own land, while others plan to purchase land as part of the overall project. For some buyers, land is still the part of the plan that needs to be finalized. The important part is making sure the land approach aligns with the loan structure and your overall budget, since construction financing can accommodate land in more than one way depending on how the loan is set up. - Submit Plans, Specs, and Contract for Review
By this stage, all the details come together for formal review. You’ll submit the plans, specifications, and contract so the full scope of the project can be evaluated. Underwriting and the construction team need a clear picture of what’s being built, who’s building it, and how the budget is structured. - Full Loan Application and Approval
Once the builder and project documents are in, you’ll complete the full loan application and the file moves into underwriting. During this phase, your qualifications and the construction details are reviewed together so everyone is working from the same complete picture. - Closing
When underwriting is complete, you’ll move to closing. Depending on whether you’re using a One-Time Close or a Two-Time Close structure, this is either the single closing that sets the full project in motion, or the first of two. - Construction Begins and the Draw Process Starts
Once construction begins, funds are typically released in stages called draws, as work is completed and verified. During the build, payments are often structured as interest-only based on the amount drawn, rather than the full loan amount. The draw schedule and inspection process help keep the project aligned with the budget and build progress. - Final Inspection and Closeout
When the home is built, a final inspection is completed, and the construction phase is closed out. From there, the financing transitions into the long-term mortgage based on the structure used, and the project is finalized for move-in.
Construction Lending Experience Matters in NC
In North Carolina—especially across the Triad— construction financing tends to move more smoothly when you work with a team that’s comfortable with the process.
Construction loans involve builder documentation, detailed plans and budgets, and a draw process that has to stay aligned with the build timeline. The goal isn’t just getting approved, it’s setting the project up with clear expectations so the build can stay on track.
FAQs
Can you use a VA loan to build a house in North Carolina?
Yes. Eligible VA borrowers may be able to use their VA benefit to finance the construction of a new primary residence in North Carolina, depending on the loan structure and program guidelines.
Do you have to own land before getting a construction loan?
Not always. Some borrowers already own land, while others purchase land as part of the overall construction plan, depending on how the loan is set up.
When do payments start on a construction loan?
During the construction phase, payments are typically interest-only and based on the amount that has been drawn, not the full loan amount.
What’s the difference between a One-Time Close and a Two-Time Close?
A One-Time Close combines construction and the permanent mortgage into one closing, while a Two-Time Close uses a separate construction loan and a second closing for the permanent mortgage once the home is complete.
A quick way to remember it: OTC = one closing. TTC = two closings (one to build, one when it’s finished).
Is a One-Time Close or Two-Time Close better?
It depends on your build, timeline, and program guidelines. The best option is the one that fits your project and keeps expectations clear from day one.
If you’re thinking about building in Winston-Salem or anywhere in the Triad, we can walk through your VA eligibility, your land/build plan, and whether a One-Time Close or Two-Time Close structure makes the most sense for your timeline.
Ready to turn plans into your new address? Call the Sharpe Mortgage Team at (336) 575-9448 to talk through your VA construction loan options.
