VA Construction Loans in Maryland
Mike Certo · Cornerstone First Mortgage · NMLS #260555 ·
The VA does allow $0-down construction financing, but the number of lenders who actually offer it nationally is small — and shrinks further when you scope to Maryland. Most national VA lenders push veterans toward standard purchase loans on completed homes because the construction process adds underwriting complexity. Here's the MD-specific reality.
Two paths to VA-financed new construction
Path 1 — Two-close (construction loan + permanent VA takeout)
How it works: You get a short-term construction loan from a regional bank during the build (6-12 months), then refinance into a VA permanent mortgage at completion. Two underwrites, two closings, two sets of closing costs.
Pros: Most MD regional banks (Western Alliance, Bank of Maryland, First Citizens) offer construction-only financing. Easier lender pool. Can lock the VA permanent rate at completion.
Cons: You pay closing costs twice. The construction loan rate is typically 1-2% higher than the eventual VA rate. Cash flow gap between construction draws and your permanent loan funding.
Path 2 — Single-close (true VA construction loan)
How it works: One loan, one closing. The lender funds construction draws during the build, then automatically converts to a 30-year VA mortgage at completion. No second closing, no re-qualifying.
Pros: One set of closing costs. Rate locked at the original closing, not at completion (protects against rate increases during the 9-12 month build). Zero down still applies.
Cons: Very few lenders offer it. Most that do include modest pricing differences vs standard VA purchase. The 36-month VA recoupment rule complicates this if you later refinance.
MD reality: As of 2026, single-close VA construction lenders serving Maryland include Veterans United, Newrez, AmeriSave, and a handful of regional banks and credit unions that lend across the state. The list changes quarterly. Mike maintains a current short list and matches Veterans to the right lender based on builder, timeline, and entitlement.
Builder approval — the gate that kills most VA construction deals
Before any lender will close a VA construction loan, your builder must be VA-registered with the VA Regional Loan Center in Baltimore (covers all of MD). This is a paperwork process the builder does, not the veteran. It includes:
- Builder profile + license verification (MD ROC registration)
- Surety bond proof
- Sample warranty + dispute resolution process
- Construction draw schedule template
National production builders almost always have this in place because they've done VA loans before. Custom + semi-custom builders often don't. Ask the builder for their VA Builder ID before signing the build contract. If they don't have one, the registration takes 4-8 weeks and can delay your start.
MD production builders with active VA construction lending experience
This isn't an endorsement — it's a list of builders who have closed VA construction loans in MD in the last 24 months that Mike has either personally worked with or has direct deal data on:
- Meritage Homes — Baltimore/Bethesda/Annapolis; Energy Series + Outdoor Living Series. VA-friendly sales staff.
- Lennar — statewide; Wi-Fi Certified + Everything's Included pricing model simplifies VA appraisal.
- D.R. Horton + Express Homes — Baltimore/Annapolis/Glen Burnie. Express is the entry-level brand that fits most E-5 through E-7 BAH brackets.
- Pulte / Centex / Del Webb — Pulte for move-up, Centex for entry-level, Del Webb for 55+ retiring Veterans. Strong presence in the DC suburbs and around Columbia.
- Mattamy Homes — Baltimore metro + Annapolis, growing inventory around Bowie and the Eastern Shore.
- Richmond American — Montgomery, Prince George's, and Frederick counties.
- KB Home — Baltimore metro entry-level + first-time-buyer focused.
Semi-custom + true-custom builders can also do VA construction, but expect a 2-4 month longer pre-construction phase to handle VA approval paperwork. Worth it for the right lot.
Construction loan timeline (typical MD project)
| Phase | Duration | What's happening |
|---|---|---|
| Pre-construction | 4-8 weeks | Plans approved, builder VA-registered, lender underwrites land + construction package |
| Foundation + framing | 8-12 weeks | First major draw at foundation; second at framing inspection |
| Mechanicals | 6-10 weeks | Electrical, plumbing, HVAC. A wet Maryland spring or a hard winter freeze can slow concrete cure and exterior work |
| Drywall + finishes | 6-10 weeks | Third draw at drywall complete; final draw at completion |
| Certificate of occupancy | 2-4 weeks | County inspection + utility connections |
| VA appraisal + permanent loan funding | 2-3 weeks | If two-close path |
| Total | 8-12 months | Baltimore metro standard; Annapolis + smaller cities often faster |
What the VA appraiser checks on new construction in MD
VA Minimum Property Requirements (MPRs) on MD new construction:
- Working heat and air conditioning — non-negotiable through Maryland's four seasons
- Termite warranty plus soil treatment required (Maryland has very active subterranean termites)
- Roof life expectancy of 5+ years at appraisal — usually trivial on a new build
- Flood-zone compliance and no standing water in coastal and Chesapeake Bay-adjacent areas, with proper grading and drainage away from the foundation
- Adequate setbacks from tidal water and 100-year floodplains — important on the Eastern Shore and along the Bay
- Working well plus septic where there's no public utility, or proof of connection to county water and sewer
The single most common VA appraisal issue on MD new construction: drainage and grading after a heavy rain. The appraiser may flag standing water or erosion at the driveway-garage interface, especially on lots near the Bay. Easy fix; just plan for it.
Frequently asked questions
Can I use my full VA entitlement on construction + buy a second home later?
Yes if your construction loan principal stays under your remaining entitlement. Most MD VA construction loans use full entitlement. You can restore entitlement later by selling + paying off the first VA loan, or with one-time-restoration if it qualifies.
Are funding fees the same on VA construction?
Yes. Standard VA purchase funding fee table applies (2.15% first use, 3.30% subsequent at $0 down). Waived for 10%+ disability rating.
Can I buy the lot first with a regular loan and add VA construction later?
Yes — and often the cleanest path. Use a regular lot loan (~$60K-$120K typical MD build-ready lot), then layer the VA construction loan on top with the lot as your "down payment equivalent." Effectively gives you zero out-of-pocket at construction start if lot equity covers the deposit.
Does the VA cap construction loan size in MD?
The 2026 conforming limit ($832,750 baseline) applies to standard VA construction in most Maryland counties. In the DC-metro high-cost counties (Montgomery, Prince George's, Frederick, Charles, Calvert), the limit rises to $1,249,125. Full-entitlement Veterans have no county loan cap at all. Above the conforming limit you're in jumbo territory, with a different lender list. Mike has VA jumbo construction contacts for higher-end Bethesda and Potomac builds.
Considering a VA construction loan? Mike walks veterans through builder selection, lender matching, and timeline planning before you sign anything. Get a free 15-minute consult.