Purchasing a New Construction Home with Your Hawaii VA Loan

Purchasing a new construction home with a VA loan is an option for those who wish to buy a home in Hawaii. In order to complete the process, however, it is helpful to know what the VA considered to be “new construction” and what steps need to be taken in order to qualify for a loan for this type of purchase.

What is “New Construction”?

According to VA guidelines, a home is considered to be “new construction” if it has been completed within the past year and it has not been sold by an owner occupant. 

Can a New Construction Condo be Purchased with a VA Loan?

Both condos and site condos, which are those that look like a single-family residence but are located on a lot that has been divided by a Condo Property Regime, must be approved by the VA before it can be purchased with a VA loan. You can easily check to see if a condo has already been approved by the VA by using this online condo check tool.

What Can I Do If My New Construction Property Has Not Already Been Approved?

If the new construction property you are interested in purchasing has not already been approved by the VA, you can take steps to get the approval that you need. To do this, the property will need to go through the VA condo approval process. So long as the seller is willing to go through the process, it will take about three to six weeks to get the condo or site condo approved. This process will need to be completed before an appraisal can be ordered. 

What is Required to Get New Construction VA Approved?

In order to go through the approval process with the VA, a property needs to have a VA builder ID as well as specific builder certifications and warranties in place. Many builders will already have the VA Builder ID, but those builders that only develop homes in small bunches may not have the ID.  To obtain a VA Builder ID, the builder will need to complete a variety of forms. These include:

  • VA Accepted Builder Packet
  • Form 26-421
  • Form 26-8791
  • VA Pamphlet 26-7 Ch. 10 Exhibit 1

The builder will also need to meet the Builder Credit Report Requirement and will need to provide proof of Contractor’s License. 

What is Required for the VA Builder Certification?

To obtain the VA Builder Certification, the builder must certify all of the following:

  • Borrower’s New Construction Not Inspected Acknowledgement
  • Solders and Flux Lead Certification
  • NPMA99a-Subterranean Termite Builder’s Guarantee
  • NPMA99b-Subterranean Termite Service Record
  • Builder’s Certification of Construction to CABO Standards
  • VA Form 26-1859 – VA Builder Warranty

Providing these certifications involves completing a number of forms. For builders who have not completed the task before, it may seem a bit overwhelming to complete the forms due to the great deal of legalese contained within them. Nonetheless, it is ultimately a relatively simple process to complete with the right guidance from your real estate agent. 

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