Looking for builder in Massachusetts

[John N.]

Does anyone know a builder in Massachusetts that is willing to purchase the land and build a home up front and then you could purchase the property once built? I want to use my VA loan so I can purchase the property with very little down. I know this is a long shot but you never know!

Thanks!

-Jack

[Vahe Ohannessian]

Hi John,

First of all, thank you for your service!

I have never heard of this actually happening, though I have had someone approach me with the proposal, which I could not do and here's why: I'm going to assume you're want the house built for your needs, and especially with very little money down, there's no commitment from you that you're going to buy the house. That means both the builder and the builder's lender from whom they're getting a construction loan will need to feel absolutely confident that the house can be sold on the market for a good profit, otherwise the builder won't do the project and the lender won't lend on the project. So you have to look at it from their perspective. The builder is putting a substantial down payment for the land, and it would be especially risky for them if they customized for you and then your purchase fell through, and they can't sell - so they won't do it.

Having said that... have you looked into whether or not the VA will do construction loans instead of the standard mortgage for an existing home? That means the construction loan would be in your name, and you would be buying the land with a part of the loan, and the other part would go in increments to pay the builder as they complete each phase of construction (it's called "Construction Draws"). When it's all built, the loan converts from a construction loan to a conventional mortgage. I suggest you look into that.

Best of luck!