Find a new builder! Veterans are prohibited from paying certain closings costs which are referred to as non-allowables. Depending on your lender and the title company, these non allowables can typically range from $1500-$3000. This is most likely the reason that your builder is pushing against VA financing. The builder will also have to pay for a 2/10 warranty which may also be the reason. This is required for VA, FHA and USDA loans which is why I believe the non-allowables are the real reason.
Unfortunately a builder can choose to build and sell a home with a financing requirement that excludes specific types of financing including VA. The builder is at full liberty to do this without violating any fair lending laws. If you are dead set on using this builder you can have your lender cover the non allowables however this typically equates to an interest rate increase of .125%-.25% to cover these costs.
I am a retired U.S. Army First Sergeant and now a Realtor with Ebby Halliday RealtorsÂ®, http://www.ebby.com/agents_offices/find_agent/info/michaelbr I purchased a new home from a builder here in Frisco, TX in May 2011 and it was a very simple process, yes, the guidelines are different from other loans, but the process is still simple! If the person you are dealing with tells you the process is difficult, perhaps you should contact the home office of the builder for assistance or seek the representation of a REALTORÂ®.
There are lots of builders out there. Get another one with VA experience and get an experienced Realtor to represent you. Someone with New build experience.
If you are going to build a new home you have a chance "to get it right" for you and an experienced realtor can help you be sure the plans work, you are not wasting money on wasted space and help you stay in budget.
Keep your options open. I think VA financing is best in most cases, but not all.
A builder discouraging you? This surprises me.
New home construction should not be that big of a deal.
Old homes that need work...that can be a problem.
What does your realtor say? What does your lender say? Can your lender
talk to the builder to give reassurances. There are a lot of "horror" stories
about VA financing, that probably just aren't true. They don't work for all cases
but with a new home I don't see a problem. It will need to appraise....and the
home will need to be in good condition.
Go for it.
If you need help let me know. ALWAYS ALWAYS ALWAYS use a realtor when purchasing from a builder.
You can see why at this link:
The good thing about VA financing is that it takes some of the financial burden off of the purchaser. The big mistake, in my view, it that it has placed some of that burden on the seller. In my view, the Government - We the People - should absorb that cost as a small part of the collective "Thank You" for your service.
But, we don't, and it is, and so, yeah, you might find it more difficult to put a deal together with VA financing than if you had FHA financing.
Did you hire a Realtor to represent you and your best interests in buying a home? That Realtor should be your advocate with the builder. You have seen some good information below...and it likely is a matter of money (since a VA buyer is not allowed to pay some of their closing costs so the seller has to pay them). In the Dallas/Fort Worth area the non-allowable expenses are not too high....so the builder should be able to work with you to get this done.
Good luck! Enjoy your new home.
Coldwell Banker Jane Henry Realtors
North Texas Top Team, Realtors