New construction is booming across Goochland County, Manakin-Sabot, and the Richmond West End corridor — and financing a build is a completely different process than buying an existing home. If you’ve been eyeing a lot in Oilville, a custom home in Manakin-Sabot, or a new development near Short Pump, understanding how new construction mortgages work in Virginia could be the difference between breaking ground on schedule and losing your contract.
I’m Duane Buziak, Mortgage Maestro — Scotsman Guide Top Originator 2025 (#114, $44.4M) and 2026 ($51.2M), VA Broker of the Year 2024–2025, and an independent broker with access to 500+ wholesale lenders and zero origination fees. I’ve helped hundreds of Virginia buyers navigate construction financing, and this guide walks you through every stage: from choosing the right loan structure before you sign a builder contract, all the way to your final walkthrough and permanent mortgage.
Whether you’re building custom on raw land in Goochland County or buying a spec home in a new Crozier subdivision, the steps below apply. One important note upfront: new construction financing involves two distinct phases for most buyers — a construction loan that funds the build, and a permanent mortgage that replaces it at completion. Some programs combine both into one. Knowing which path fits your situation is Step 1.
Many buyers in Goochland County are finding that the new construction market along the US-250 and I-64 corridors moves fast. Commuter demand from Richmond’s West End employment centers drives competition for new builds, and arriving at a builder’s table without your financing structure sorted puts you at a real disadvantage. Let’s fix that.
Step 1: Choose Your Loan Structure Before You Sign Anything
This is the step most buyers skip — and it’s the one that causes the most problems. Before you tour model homes, before you pick a lot, before you shake a builder’s hand, you need to decide which construction loan structure fits your situation.
There are two primary paths for financing new construction in Virginia.
Construction-to-Permanent (One-Time Close): This structure wraps the construction loan and the permanent mortgage into a single closing. You lock your rate and terms at the start, pay one set of closing costs, and go through one appraisal. When the build is complete, the loan automatically converts to your permanent mortgage. No second application, no second closing table. For buyers who want certainty and simplicity, this is often the better path.
Two-Time Close: Here, you take out a standalone construction loan to fund the build, then apply for a separate permanent mortgage at completion. You pay closing costs twice and go through underwriting twice. The upside is flexibility: if your timeline is uncertain, or if you want to shop rates aggressively when the home is finished, a two-close structure gives you that option. The downside is exposure — you’re taking on the risk that rates or your financial situation could change between the two closings.
Here’s something worth knowing: builder-preferred lenders often push two-close products because they benefit from the construction loan relationship. As an independent broker with access to 500+ wholesale lenders, I can compare one-time close options across multiple programs — VA, FHA, USDA, and Conventional — to find terms that actually work for you, not just for the builder’s sales process.
Program-specific notes: VA construction-to-permanent loans may allow eligible veterans to finance land, build, and permanent mortgage in one closing with no down payment requirement, subject to entitlement and lender availability. FHA offers a one-time close construction product that follows standard FHA guidelines. USDA’s Single Family Housing Guaranteed Loan Program includes new construction for eligible rural properties. Conventional construction loans through Fannie Mae and Freddie Mac typically require 5–20% down depending on occupancy and credit profile.
The pitfall I see most often: buyers sign a builder contract before locking in their financing structure, then discover the builder’s preferred lender doesn’t offer the program they actually qualify for. Verify your structure first. Everything else follows from this decision. If you’re weighing lender options, reviewing smart mortgage alternatives for Goochland County buyers can help you understand what independent brokers offer versus retail banks.
All rates and program availability are subject to change and credit approval. Use “may qualify” as your baseline when evaluating eligibility.
Step 2: Get Pre-Approved with a Construction-Savvy Lender
A standard pre-approval letter from your bank won’t cut it for new construction. Construction-to-permanent loans involve a completely different underwriting process, and many lenders — including large retail banks — simply don’t have the infrastructure to handle them well.
Do I need a separate pre-approval for a construction loan in Virginia? Yes. A construction loan pre-approval evaluates factors that a standard purchase pre-approval doesn’t touch: the land value or lot cost, the builder’s approval status with the lender, the proposed draw schedule, and contingency reserves. You need a lender who understands all of these pieces.
I offer a NoTouch soft-pull pre-approval process: I can check your eligibility and buying power without triggering a hard credit inquiry. Your score stays intact while you explore your options. For buyers in the early planning stages — still deciding between lots in Manakin-Sabot or a subdivision in Crozier — this is a significant advantage.
Credit score minimums vary by program. VA construction loans may qualify down to 500 FICO through select wholesale lenders — that’s a threshold most retail banks won’t touch. FHA typically requires 580 or above. Conventional construction loans generally start at 620. Knowing where you stand before you commit to a builder timeline protects you from surprises mid-build.
Income documentation also works differently for construction loans. W-2 buyers follow a familiar path. Self-employed buyers in Goochland County may qualify through Bank Statement loan programs that use 12–24 months of deposits rather than tax returns — useful when write-offs reduce your reported income. For investment builds, DSCR (Debt Service Coverage Ratio) loans qualify on projected rental income rather than personal income.
One more reason having access to 500+ wholesale lenders matters here: builder timelines extend. It happens regularly. A lender with limited capacity may reprice your rate lock or decline to extend when the framing runs two months behind. I work with wholesale lenders who build flexibility into their construction products specifically because builds don’t always finish on schedule. Learn more about home financing options in Goochland County to see the full range of programs available through wholesale channels.
Get your construction pre-approval in hand before you start serious builder conversations. It tells you exactly what you can build, and it tells the builder you’re a serious buyer.
Step 3: Confirm Your Builder and Lot Are Lender-Eligible
Not every builder is approved by every lender. Not every lot qualifies for every loan program. Discovering an eligibility problem after you’ve signed a contract is an expensive and stressful situation — and it’s entirely avoidable if you verify early.
Builder eligibility typically requires the builder to hold a current Virginia contractor’s license, carry general liability insurance, and demonstrate a track record of completed residential projects. Lenders — especially for VA and FHA construction loans — have formal builder approval processes. If your builder hasn’t been through that process with your lender, expect delays. I can help verify builder eligibility across multiple lenders before you commit.
Lot eligibility depends on what you’re working with. Raw land in rural Goochland County, a platted lot in a subdivision, and a builder-owned lot all have different financing rules. Builder-owned lots are often the simplest path for subdivision buyers. Raw land purchases may require a separate land loan or a lender willing to fold the land cost into the construction-to-perm structure.
Does Goochland County qualify for USDA new construction loans? Parts of Goochland County, including areas around Oilville and Crozier, have historically fallen within USDA rural eligibility zones. USDA’s Single Family Housing Guaranteed Loan Program does cover new construction for eligible properties. However, USDA eligibility maps are updated periodically, and you must verify the specific address at the USDA eligibility portal before counting on this program. If your lot qualifies, USDA construction financing could mean zero down payment on your new build — a significant advantage worth checking.
For FHA construction loans, Goochland County falls within the Richmond, Virginia MSA for loan limit purposes. Confirm the current FHA loan limit at HUD.gov before finalizing your build budget, since the limit applies to the finished home value, not just the construction cost.
VA construction loans add another layer: the builder must meet VA-specific requirements, and the property must meet VA Minimum Property Requirements. Eligible veterans who work with a VA-approved builder on a VA-eligible lot may qualify for a one-time close with no down payment, subject to entitlement limits and lender availability.
The appraisal for a new construction loan is based on “subject to completion” value — meaning the appraiser evaluates the finished home based on your plans, specifications, and comparable sales in the area. This is why the quality of your plans and the accuracy of your build budget matter so much. A weak spec package can result in a lower appraised value and a financing gap before the first nail is driven.
Pitfall to avoid: choosing a builder who isn’t lender-approved, or a lot that doesn’t meet program requirements, can derail your financing entirely. Verify both before you sign anything.
Step 4: Understand the Draw Schedule and Construction Phase
Once your loan closes and construction begins, the financing shifts into a different gear. You’re no longer dealing with a lump-sum mortgage — you’re managing a draw schedule, and understanding how it works keeps your build on track and your budget intact.
Draws are staged disbursements tied to completed construction milestones. A typical draw schedule follows four to six stages: lot preparation and foundation, framing and roof, rough mechanical work (plumbing, electrical, HVAC), drywall and interior finishes, and final completion. Each draw requires a lender-ordered inspection — not just the builder’s word that the work is done. An independent inspector confirms the milestone before funds are released.
What do you pay during construction? During the construction phase, you typically make interest-only payments on the amount drawn to date. As more draws are released, your interest payment increases incrementally. This is important for budgeting: if you’re also paying rent or a mortgage on your current home, you’re carrying two housing costs simultaneously during the build. Plan for this before you break ground. Using a mortgage calculator for Goochland County can help you model your projected permanent payment well before conversion so you’re not caught off guard.
Timeline risk is real. Builds run long — weather delays, material lead times, subcontractor scheduling. If you’re in a one-time close product with a rate lock, your lender needs to be able to accommodate extensions without repricing you out of your original terms. This is a specific question to ask any lender before you commit: what happens if my build extends beyond the original completion date?
Builder allowances and change orders deserve special attention. Builder allowances are budgeted amounts for specific categories — flooring, cabinets, fixtures. If you upgrade beyond the allowance, you pay the difference. Change orders made mid-build can affect your loan amount and, more importantly, your appraised value. If a change order increases your build cost above the original appraised value, you may need a re-appraisal before the lender will release additional funds. That takes time and money.
Keep a contingency reserve. Lenders typically require 10–15% of the build cost held in reserve for overruns, and even if your lender doesn’t require it, you should maintain it. Builds almost always encounter unexpected costs. Having reserves means you don’t have to stop work while you sort out financing.
Step 5: Lock Your Rate at the Right Time
Rate lock strategy for new construction is more nuanced than for a standard purchase, and getting it wrong can cost you significantly.
How long can I lock a rate for new construction in Virginia? Standard rate locks run 30–60 days — fine for a resale purchase, completely inadequate for a new build that might take six to twelve months. Extended rate locks of six to twelve months are available through many wholesale lenders, and I have access to these products across 500+ lenders. Extended locks typically carry a premium, but they protect you against rate increases during the build period. Whether that premium is worth it depends on current rate volatility and your build timeline.
The timing of your lock depends on your loan structure. With a one-time close construction-to-permanent loan, you lock your permanent rate at application — before the build begins. You’re protected from day one, but you’re also committing to that rate regardless of what happens to the market during construction. With a two-time close structure, you lock at the permanent loan stage, after completion. You get to see where rates land, but you carry the risk that they’ve moved against you.
Float-down options exist with select lenders: if rates drop meaningfully before your closing or conversion date, you may be able to capture the lower rate. This is a feature worth asking about specifically. Not all lenders offer it, but through wholesale channels, it’s available.
Adjustable-rate mortgages may offer a lower initial rate for buyers who plan to refinance or sell within a few years after completion. Before choosing this path, it’s worth reading up on adjustable rate mortgages in Virginia to fully understand how rate adjustment periods work and what risks apply after the initial fixed term.
All rates are subject to change and credit approval. No rate outcome can be guaranteed. What I can guarantee is that you’ll see competitive options across a wide range of wholesale lenders — not just what one bank has available on any given day.
Step 6: Navigate the Final Inspection and Conversion to Permanent Mortgage
The finish line for new construction financing is the Certificate of Occupancy — the CO. This document, issued by the local building authority after a final inspection, certifies that the home is safe and habitable. You cannot convert a construction loan to a permanent mortgage without it. Everything in the final phase of your build should be oriented toward getting that CO issued cleanly and on schedule.
Before the CO is issued, your lender will order a final inspection or re-inspection to confirm the completed home matches the approved plans and the original appraised value. If significant changes were made during construction — upgrades, layout modifications, material substitutions — this is where those changes get scrutinized. Discrepancies between the finished home and the appraised plans can delay conversion and require additional documentation or a new appraisal.
For one-time close loans: conversion to the permanent mortgage is automatic or requires minimal paperwork. There’s no new application, no second round of closing costs, and no updated income documentation in most cases. The loan simply shifts from the construction phase to the amortizing permanent phase. This is one of the clearest advantages of the one-time close structure — the finish line is clean.
For two-time close loans: you’re essentially starting a new mortgage application at this stage. Updated income documentation, a new appraisal, full underwriting, and a second closing with second closing costs. If your financial situation has changed during the build — job change, new debt, income fluctuation — this is where it becomes a problem. Plan accordingly.
Down payment assistance programs available in Virginia may apply at the permanent mortgage stage for eligible buyers. If you’re using a DPA program layered with FHA or another eligible product, confirm with me in advance how it interacts with the construction-to-perm structure — the timing of DPA disbursement varies by program.
Do your final walkthrough with a punch list mindset. Incomplete items — a missing fixture, an unfinished trim detail, a door that doesn’t close properly — can delay the CO and push back your conversion date. Walk the home systematically, document everything, and give the builder a clear written list with a completion deadline tied to your closing schedule. Verify your broker’s credentials and licensing at NMLS Consumer Access before committing to any lender for your permanent mortgage conversion.
Frequently Asked Questions: New Construction Mortgages in Virginia
Below are the most common questions Goochland County buyers ask when financing a new construction home in Virginia.
Q: What is a construction-to-permanent loan in Virginia and how does it work?
A: A construction-to-permanent (one-time close) loan wraps the construction financing and the permanent mortgage into a single closing. You lock your rate at application, pay one set of closing costs, and the loan automatically converts to the permanent mortgage when the build is complete. This is the most common structure for Goochland County buyers building custom homes in Manakin-Sabot or buying new construction in Crozier and Oilville subdivisions. Duane Buziak (NMLS #1110647) can compare one-time close options across VA, FHA, USDA, and conventional programs through 500+ wholesale lenders.
Q: Can I use a VA loan to finance new construction in Goochland County, Virginia?
A: Yes. VA construction-to-permanent loans may allow eligible veterans to finance land, construction, and the permanent mortgage in one closing with no down payment requirement, subject to entitlement and lender availability. The builder must be VA-approved and the property must meet VA Minimum Property Requirements. As a wholesale broker, Duane Buziak (NMLS #1110647) can offer VA construction financing down to 500 FICO through select lenders. Verify credentials at NMLS Consumer Access.
Q: Does Goochland County qualify for USDA new construction loans?
A: Parts of Goochland County — including areas around Oilville (23066), Crozier (23039), and Goochland Courthouse (23063) — have historically fallen within USDA rural eligibility zones. USDA’s Single Family Housing Guaranteed Loan Program covers new construction for eligible properties, potentially with zero down payment. Eligibility boundaries update after each census, so always verify the specific property address at the USDA eligibility portal before assuming coverage.
Q: How long can I lock a mortgage rate for new construction in Virginia?
A: Standard rate locks of 30–60 days are not adequate for new construction. Extended rate locks of 6–12 months are available through many wholesale lenders. Duane Buziak (NMLS #1110647) has access to extended lock products across 500+ wholesale lenders, including float-down options that allow borrowers to capture a lower rate if the market improves before closing. The right lock period depends on your specific build timeline in Goochland County.
Q: What credit score do I need for a new construction mortgage in Virginia?
A: Credit score minimums vary by program. VA construction loans may qualify down to 500 FICO through select wholesale lenders. FHA construction loans typically require 580 or above. Conventional construction loans generally start at 620. Self-employed borrowers may qualify through Bank Statement loan programs using 12–24 months of deposits rather than tax returns. Contact Duane Buziak at (804) 212-8663 for a no-impact soft-pull pre-approval.
Q: What is a Certificate of Occupancy and why does it matter for my construction loan?
A: A Certificate of Occupancy (CO) is issued by Goochland County’s local building authority after a final inspection confirms the home is safe and habitable. You cannot convert a construction loan to a permanent mortgage without a CO. For one-time close loans, conversion is automatic or requires minimal paperwork once the CO is issued. For two-time close loans, the CO triggers a full second mortgage application with new underwriting and closing costs.
Putting It All Together: Your New Construction Mortgage Checklist
New construction financing in Virginia moves through six clear stages. Here’s the fast version before you go:
1. Choose your loan structure first. One-time close or two-time close — decide before you sign a builder contract. Know which programs you’re eligible for: VA, FHA, USDA, or Conventional.
2. Get a construction-specific pre-approval. Use the NoTouch soft-pull process to check eligibility without a hard credit inquiry. Know your credit score, income documentation path, and program options before builder conversations begin.
3. Verify builder and lot eligibility early. Confirm your builder is lender-approved, check USDA rural eligibility for Goochland County addresses, and confirm FHA loan limits if applicable. Don’t assume — verify.
4. Understand the draw schedule and budget for the construction phase. Interest-only payments increase as draws are released. Keep a 10–15% contingency reserve. Avoid material change orders after appraisal.
5. Lock your rate strategically. Extended rate locks are available for longer builds. Ask about float-down options. Understand the difference between one-close and two-close rate lock timing.
6. Finish strong at the CO stage. Final walkthrough with a punch list, confirm the home matches approved plans, and know whether your conversion is automatic or requires a second full application.
As a Goochland-local broker ranked among the top mortgage originators in the country — Scotsman Guide Top Originator 2025 (#114, $44.4M) and 2026 ($51.2M), with zero origination fees and access to 500+ wholesale lenders — I work with buyers across Goochland County, Manakin-Sabot, Oilville, Crozier, Short Pump, and the Richmond West End to find construction financing that fits the actual build, not just a generic product off a bank’s shelf.
The 24-Hr Guarantee means you get answers fast — because builder timelines don’t wait for slow lenders.
Ready to explore your new construction mortgage options in Goochland County? I can check your buying power with a soft pull — no credit impact — and compare programs across hundreds of wholesale lenders to find the right construction-to-perm structure for your specific build. Connect with a Goochland loan officer today to get started, or call and text Duane Buziak directly at (804) 212-8663. You can also apply online or use the mortgage calculator at GoochlandMortgage.com to model your permanent payment before conversion.
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