Finding the Right Home Builder
Finding the right builder can be a challenge, especially for first-time buyers who don't know where to start. That's where we can help! Our lenders have created relationships with many contractors who are experienced in the One-Time Close process. They can help get you in touch with knowledgeable contractors who are not only familiar with this particular mortgage process, but can also help guide you to make the best choices, while keeping the vision you have for your new home!
However, if you're a homebuyer planning to find and employ your own contractor, it's important that you know the guidelines every builder must meet for FHA or VA Single Close Loans.
Do I Need to Hire a Builder?
First things first- you cannot act as your own builder, whether or not you have the experience. Nor can you be responsible for hiring any sub-contractors. The builder you select must be a separate party who acts as the general contractor or construction coordinator, meaning he is responsible for "turnkey" completion of the property and all site improvements. You cannot hire a contractor you are related to, either!
Note: Borrowers should know that while FHA and VA loan rules permit the borrower to act as their own builder, lender standards still apply. Seller, borrower, and/or family members cannot act as contractor or complete any work on the home. Just to be clear, you must use the licensed/approved builder from start-to-finish and cannot deviate from the plans whatsoever.
Connecting the Builder and the Lender
Any builder you select needs to be registered with your lender. While the guidelines may differ depending on the lender, your builder will typically need to send in certain documents to gain authorization, such as:
- Complete Builder/Retailer Application package provided by your loan officer
- Builder/Retailer State License
- Certificate of insurance for inland marine coverage, or builder's risk/course of construction insurance will be required on every loan
- Certificate of insurance for General Liability and Workers Compensation (or letter explaining why it is not required)
- For site-built homes: 2 years federal tax returns and year-to-date profit/loss statement, current balance sheet or personal financial statement, and executive summary with overview of experience and history on company and principal
- For VA approval, builders/retailers will need to be registered with the VA
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