VA Loan & New Construction in San Antonio: 2026 Guide for Veterans

by Christopher Beal

LAST UPDATED: OCTOBER 22, 2026 | BY CHRISTOPHER BEAL, U.S. ARMY VETERAN & REALTOR

Newly built limestone and brick single-story home with fresh sod, with framed houses under construction down the street (illustrative image, not a specific San Antonio listing)

Short answer: Yes. VA.gov lists building a new home as an approved use of a VA-backed purchase loan, and a completed new home can be bought with a standard VA purchase loan, with no down payment as long as the price is not higher than the appraised value and you will live in the home. The conditions that matter for new construction: the lender, not VA, decides whether it offers construction financing and how much it will lend; the home must appraise; and since March 31, 2025 VA no longer requires a VA builder ID number for most new construction, but VA also does not inspect the build or step into builder disputes for you (VA Circular 26-25-1). Your own inspections and the builder's written warranty are your protection.

I am Christopher Beal, a U.S. Army veteran and REALTOR (TREC #723559), Owner of Veteran Real Estate San Antonio, brokered by eXp Realty. More about how I work.

Updated October 22, 2026: corrected the funding fee for later use with 10 percent or more down (1.25 percent, not 1.5 percent); replaced the builder section with what VA Circular 26-25-1 actually says; removed a table line that said custom builders must be registered with VA; replaced the August and June market figures with a fresh, complete SABOR MLS pull; and removed an area table with price ranges, builder names and drive times I could not confirm.

What Does VA Actually Allow for New Construction?

On its purchase loan page, VA lists "build a new home" among the uses of a VA-backed purchase loan, alongside buying an existing home. The same page sets the basics that apply to a new build too: you must intend to live in the home, the loan may need no down payment as long as the sales price is not higher than the appraised value, and there is no private mortgage insurance (VA.gov purchase loan, updated January 7, 2026).

With full entitlement there is no VA loan limit, but that does not mean any amount: your lender decides how much you can afford, and the most VA will back is based on the lower of the appraised value or the purchase price. If you still have a VA loan open, your remaining entitlement is figured from your county's FHFA conforming loan limit, and your lender may require a down payment so that entitlement plus down payment covers 25 percent of the loan (VA.gov loan limits, updated August 12, 2025).

What VA does not do is make every lender offer construction financing. Whether you can get a construction-to-permanent (one-time close) VA loan, which lenders call it, how draws are paid to the builder and what credit, reserves or builder documents they want are lender requirements, not VA rules. Many lenders only finance a completed home. Ask that question first, in writing, before you pick a lot.

What this video covers

In this walkthrough I go through the three ways veterans finance new construction, why you want your own representation before you talk to the model-home sales agent, why a brand-new house still needs an independent inspection, how heavy upgrades can outrun the appraisal, why to ask about special district (MUD) taxes, and the 2025 change that ended the VA builder ID requirement. The article below has the current sources and figures; where the video gives a number, confirm it for the specific community and lender.

Three Ways to Use a VA Loan on a New Home

Path	How it works	What to confirm first
Completed (quick move-in) home	A standard VA purchase loan on a finished house, the same as a resale.	The completion date in the contract, the final appraisal, and your own inspection before closing.
To-be-built home with a production builder	You sign now; the builder builds with its own money and you close with a VA purchase loan when the home is finished.	How long the lender's rate lock lasts, what happens if completion slips past your report date or lease end, and the deposit terms.
Construction-to-permanent (one-time close)	One loan pays for the lot and construction in draws, then becomes your permanent VA mortgage.	That the lender actually offers it, its builder approval process, the draw schedule and who pays interest during the build.

Path availability, terms and timelines are set by the lender and builder, not by VA. Get each in writing for your contract.

A two-step route also exists: a short-term construction loan from a bank, then a VA refinance once the home is done. It means two closings and two sets of costs, and your rate is not set until the end, so compare it carefully against the paths above.

What Changed for Builders in 2025, and What It Means for You

VA Circular 26-25-1, effective March 31, 2025, ended the requirement for builders to get a VA-issued builder identification number before VA issues the Notice of Value on new or proposed construction. Builders still have to meet any state and local licensing requirements, and the builder ID is still required for a Specially Adapted Housing grant or a Native American Direct Loan (VA Circular 26-25-1, March 31, 2025).

The same circular is the part buyers should read twice. It says VA stopped its own compliance inspections of new construction in February 2006 and relies on local building inspections and construction warranties of 1 or 10 years. When a veteran now complains about a builder, VA points them to resources such as the local building department, licensing boards or a lawyer instead of stepping in. In plain terms: VA backing your loan is not VA vouching for the builder.

So before you sign, I would want three things in your file:

The builder's written warranty document itself, so you know what is covered for how long and how to file a claim.
Your own licensed inspector, at least before drywall goes up and again before closing. City inspections check code minimums, not workmanship.
Your lender's written list of what it needs from the builder, so nothing stalls at closing.

My new-construction buyer checklist walks through these steps, and why the builder's sales agent does not represent you covers the representation question.

What New Construction Is Actually Selling For in Bexar County

Quick answer: 1,995 homes built in 2025 or 2026 closed in Bexar County between July 23 and October 21, 2026. Their median closing price was $279,990, and their median original list price was $299,740 (SABOR MLS, complete pull, October 22, 2026).

Bexar County new construction, closed	Value
Closed sales, July 23 to October 21, 2026	1,995
Median closing price	$279,990
Median original list price	$299,740
Median days on market	76

Source: SABOR MLS via the LERA RESO API, pulled October 22, 2026. Filter: Bexar County, property type residential (RE), status sold, close dates July 23 to October 21, 2026, year built 2025 or later. Complete result of 1,995 records (pagination checked to the end); each median is the middle record of the full set sorted on that field. The two price medians are separate medians, not the discount on any one home. Days on market as reported in MLS.

What this tells a VA buyer: the typical new home in Bexar County closed below where it was first listed, so the first price on the sign is a starting point. When a builder does give ground, it can come as a lower price, as closing-cost credits or as financing credits, and the structure matters because of how VA treats those credits (next section). Because comparable sales drive the appraisal, heavy upgrades on top of a discounted market can leave a gap between the contract price and the appraised value that you would have to cover in cash or negotiate away.

Builder Incentives, Closing Costs and the 4 Percent Rule

VA.gov separates two kinds of seller or builder help. Credits toward your normal closing costs have no VA limit. Seller concessions, meaning anything of value added at no extra cost to you, such as paying your VA funding fee, paying off a debt or prepaying hazard insurance, are limited to 4 percent of the home's reasonable value shown on the VA Notice of Value (VA.gov funding fee and closing costs, updated October 5, 2026).

Illustrative example: on a home with a reasonable value of $279,990 (the Bexar County median close above), 4 percent is about $11,200 of concessions, on top of whatever normal closing costs the builder agrees to pay. Ask your lender how it will classify each credit in the builder's offer, including any rate buydown, before you compare offers.

Builder incentives are often tied to the builder's preferred lender. That can be a good deal, but compare the full offer, rate, fees and credits, against a Loan Estimate from an independent VA lender before you agree. My VA closing costs guide for San Antonio covers which costs fall on whom.

VA Funding Fee on a New Home

The funding fee is the same for a new build as for an existing home. VA.gov lists these rates for purchase and construction loans, as a percentage of the loan amount:

Down payment	First use	After first use
Less than 5%	2.15%	3.3%
5% or more	1.5%	1.5%
10% or more	1.25%	1.25%

Source: VA.gov funding fee and closing costs, rates effective April 7, 2023, page updated October 5, 2026. Applies to veterans, active-duty service members and National Guard and Reserve members.

You do not pay the fee if you receive VA compensation for a service-connected disability (or are eligible for it but receive retirement or active-duty pay instead), receive Dependency and Indemnity Compensation as a surviving spouse, have a proposed or memorandum rating before closing on a pre-discharge claim, or are on active duty and provide evidence of a Purple Heart on or before closing. Illustrative example: a first-time user putting nothing down on a $279,990 loan would owe 2.15 percent, about $6,020, which can usually be financed. My VA funding fee guide goes deeper.

Quick Move-In or To-Be-Built: Which Fits a PCS Report Date?

Your report date, not the builder's brochure, decides which path is realistic. A completed home closes on an ordinary purchase timeline set by your contract and lender, so it is usually the only new-construction option when your report date is close. A to-be-built or custom home depends on a completion date the builder estimates and can miss, so it fits a follow-on assignment, a known multi-year tour or a retirement date better than a near-term move. Ask the builder for a written estimated completion date, ask the lender how long it can lock your rate, and plan for what you will do if the house is late. My JBSA report-date timeline helps you work backward from your orders.

Common Mistakes With VA New Construction

Assuming every lender offers VA construction financing. Many only finance a finished home. Ask before you choose a lot or plan.
Letting the builder's agent be your only representation. The sales agent in the model home works for the builder.
Skipping inspections because the house is new. VA does not inspect the build, so your own inspector is the check on workmanship.
Over-upgrading. The appraisal has to support the total price; design-center upgrades do not always add equal value.
Treating a new home near base as a rental from day one. VA.gov requires that you live in the home you buy with the loan; ask your lender how it applies occupancy rules to your situation, including deployments.
Not asking about special district taxes. Some new communities sit in a municipal utility or other special district that adds to the tax rate. Ask for the full tax rate for the specific lot.

How I Help Veterans Buy New Construction

When I represent a buyer on a new home, I compare the builder's price against recent closed sales nearby, ask for the incentives in writing, push to have credits applied where your loan benefits most, and make sure your own inspections and the warranty document are in place before closing. If you are starting out, get pre-approved with a lender that knows VA new construction first; my VA pre-approval guide explains the steps. Then call me at (210) 882-8583 before you visit model homes so the builder registers you with your own agent.

About the Author

Christopher Beal is a U.S. Army veteran and the Owner of Veteran Real Estate San Antonio, a Beal Group practice brokered by eXp Realty (TREC License #723559). A Military Relocation Professional (MRP) and VAREP member, he is a 7-time eXp Realty ICON agent, winner of Best Real Estate Agency in the 2026 Best of San Antonio Readers' Choice (San Antonio Current, 100,000+ voters), and a 3x San Antonio Business Journal Top 25 Individual Agent (#13 in 2024, #14 in 2025, #20 in 2026). His recognition also includes 3x Platinum Top 50, 2x RateMyAgent Agent of the Year, 2x Real Producers Top 100, Five Star Professional (2026), and a RealTrends 2026 ranking. He has helped 325+ families, closed more than $125M in career volume, and holds 5.0 stars across 370+ verified reviews, working almost exclusively with military and veteran buyers and sellers across Bexar, Comal, Kendall, Medina, and Bandera counties, with a focus on VA loans, PCS moves, and homebuying near JBSA-Lackland, JBSA-Randolph, and Fort Sam Houston. He represents veteran buyers purchasing new construction with VA financing across the San Antonio area. He can be reached at (210) 882-8583.

Plan Your VA Home Purchase

Frequently Asked Questions

Can I use a VA loan to build a house in San Antonio?

Yes. VA.gov lists building a new home as a use of a VA-backed purchase loan, and you must intend to live in it. Whether you can finance the construction itself with a VA construction-to-permanent loan depends on finding a lender that offers it; many lenders only finance a completed home.

Do I need a down payment for VA new construction?

Often not. VA.gov says the loan may need no down payment as long as the price is not higher than the appraised value. With full entitlement there is no VA loan limit, though your lender still decides how much you can borrow. If you have reduced entitlement, your lender may ask for a down payment.

Does my builder need a VA builder ID?

Not for an ordinary VA-guaranteed loan since VA Circular 26-25-1 (March 31, 2025). Builders must still meet state and local licensing rules, and a builder ID is still required for Specially Adapted Housing grants and Native American Direct Loans. Your lender may have its own builder approval requirements.

Does VA inspect a new home or handle complaints about the builder?

No. Per Circular 26-25-1, VA stopped compliance inspections of new construction in 2006 and relies on local building inspections and builder warranties; for complaints it now refers veterans to local building departments, licensing boards or legal counsel. Hire your own inspector and keep the warranty document.

How much can a builder pay toward my costs on a VA loan?

Credits for normal closing costs have no VA limit. Seller concessions, such as paying your funding fee or paying off a debt, are capped at 4 percent of the reasonable value on the VA Notice of Value (VA.gov). Ask your lender how each credit in a builder offer is classified.

What is the VA funding fee on new construction?

The same as an existing home: 2.15 percent for first use with less than 5 percent down, 3.3 percent for later use with less than 5 percent down, 1.5 percent with 5 percent or more down, and 1.25 percent with 10 percent or more down (VA.gov). Veterans receiving VA disability compensation and some others are exempt.

What are new homes selling for in San Antonio right now?

In Bexar County, 1,995 homes built in 2025 or 2026 closed between July 23 and October 21, 2026, with a median closing price of $279,990 and a median original list price of $299,740 (SABOR MLS, complete pull, October 22, 2026).