The VA does not approve builders. The lender reviews your builder's license, insurance, credit, and track record and accepts them into its construction program. This guide covers what that review checks, when it happens, how long it takes, and what it does not tell you.
Before a VA One-Time Close construction loan can close, the builder has to be accepted into the lender's construction program. The review is a seven item package: a questionnaire, business credit, a state contractor's license, workers compensation or an exemption, general liability insurance, a driver's license, and a W-9. A complete package is usually reviewed in one to three business days, and once accepted the builder is registered with the lender for 12 months. Every builder on our Registered Builder List has been through it.
Builder acceptance is a surface level check. It confirms the builder is licensed, insured, pays their bills, and has built homes before. It does not tell you whether they will build yours well, on time, or at all. Do not take acceptance as a guarantee that you will have no problems.
The research is on you. Go look at homes they have built. Call previous clients yourself, not just the ones on the reference list. Ask how the project went when something went wrong, because something always does. You do not want to be the one client whose builder runs off the job, has a cash problem mid build, or hands you a house that is falling apart. Never rush this. Make sure the builder has the skill set, and make sure you like working with them. If you do not trust them, the next twelve months will be miserable no matter what the lender says.
No. The VA used to maintain a builder ID requirement, and a lot of old articles and AI answers still talk about "VA approved builders." Today the VA does not approve, certify, or list builders for construction loans. What matters is whether your builder is accepted into the construction program of the lender funding your loan. We use "accepted" or "registered" on purpose. Nobody is approving anyone, and no builder should tell you they are VA approved.
The lender's package has seven items. The builder fills out one form and attaches six documents. Here is what each one is and what the lender is looking for.
The core of the package. It asks for the business name and years in business, the license number and whether it is in good standing or has ever been revoked, whether the builder or any officer has ever failed to complete a construction contract or failed in a construction business, and whether there are current lawsuits, liens, judgments, or surety claims. It asks for three years of gross sales along with the number of renovation projects and ground up new construction projects completed each year, the number of residential projects currently under construction, three past client references, and three subcontractor references. The builder signs an authorization letting the lender verify all of it, including a business credit review.
Every field has to be filled in. A blank where the lender expects a number gets the whole package sent back.
The builder provides their Dun and Bradstreet number, and the lender wants a Paydex score of 65 or higher. If the builder does not have a D&B score, they can provide their social security number for a soft personal credit pull instead. That path requires a 620 or higher with no 60 or 90 day late payments and no bankruptcies. Thirty day lates are reviewed case by case.
Credit declines are rare. A builder who has no D&B number and also refuses the soft pull is a different story. In our experience that builder is hiding something, and even if they were not, ask yourself whether you want someone who will not show you their credit in charge of several hundred thousand dollars of your loan.
A copy of an active, current license for the state the home is being built in. A North Carolina license does not cover a build in South Carolina. Builders working near a state line need the license for the side the lot is on.
If the builder has employees, they need workers compensation coverage and the declarations page goes in the package. If the builder is a one man operation with no employees and subcontracts all the field work, workers comp is not required, and they sign the lender's exemption statement instead. The exemption also covers states where workers comp is included in the licensing fees. One or the other has to be in the package.
A copy of the declarations page showing an aggregate of $1,000,000 or more. This is the one item with no flexibility. A builder with a $500,000 policy is not accepted until the policy is raised. A builder's risk policy is not general liability and cannot be substituted for it, no matter what the agent says.
Builder's risk is a separate policy that covers the structure while it is under construction, and it does come up later in underwriting. Who buys it varies. Some builders require you to carry it, some want to control the coverage themselves. It depends on the builder and the transaction, and we work that out when the contract is finalized.
A legible copy of the builder's valid driver's license or government photo ID. This is a federal identity verification requirement, not a judgment on the builder.
A fully completed IRS Form W-9 on the 2018 revision or newer. An old form is the easiest way to get a package bounced for no good reason.
In our experience, a builder with at least two years in business and five completed ground up homes gets accepted. Ground up means a single family home built on undeveloped land. A renovation, an addition, a garage, or a shed does not count toward the five. Builders below that line are reviewed case by case. The lender will ask for a resume and a list of completed new construction projects from the last three to five years, and we have gotten builders through that way.
The lender also wants three years of gross sales on the questionnaire. Gross sales means the total value of the construction contracts the builder held, not their profit.
The questionnaire asks for three past residential clients and three subcontractors. The client projects have to have been completed more than six months ago. The lender calls both the clients and the subs. We do not coach builders on who to list, and we do not tell them what the lender asks. A reference that does not answer is a delay, and a reference that answers badly is a problem, and both of those are information about the builder.
The lender's calls are not your due diligence. Call the references yourself. Then find a client who is not on the list and call them too.
Not on day one. Most builders will not do lender paperwork until they know you are serious, and they are right not to. Respect their time. Get pre-qualified, get a realistic budget, and move down your steps first. The package goes to the builder once the loan is moving.
The exception is a builder who is short on the requirements and will need a case by case review. In that situation the paperwork goes in early, because the answer decides whether you keep working with them, and you want that answer before you have spent months on plans.
You can hand it straight to the builder and they can send it to the lender themselves, but we would rather it come to us first. Our construction coordinator checks every field and every attachment against what the lender requires before it is submitted. A complete package done correctly goes through builder acceptance in days. An incomplete one bounces back, sits in an inbox, and costs weeks. We do not get many kickbacks from the lender because we do not send incomplete packages.
One to three business days once the lender has a complete package. Every delay we have ever seen came from the builder's side: a blank field on the questionnaire, an expired insurance page, an old W-9, a reference who did not answer. How a builder handles this step tells you a lot about how they will handle the next twelve months.
Twelve months. Once accepted, the builder is registered in the lender's construction program for a year and can be used on any project in that window without a new package. That is what "registered" means on our Builder List: builders who have been through this review and are currently active in the program in your state.
Move on. The lender's parameters are understanding. They are not looking for perfection and they know things happen in a construction business. If a builder cannot clear a review that forgiving, you need to listen to that and find a new builder. We will not try to talk the lender into someone they have already said no to, and you should not want us to.
No. Builder acceptance is about the builder. Project approval comes later and is about your specific build: the plans, the construction contract, the budget, and the appraisal. That is when your builder signs the memorandum of understanding committing to the construction timeline, and it is covered under how construction draws work and in the roadmaps.
The Registered Builder List shows builders already accepted into the lender's construction program in North Carolina, South Carolina, Georgia, and Tennessee. It is a starting point, not an endorsement. The Closed Projects page shows homes those builders have delivered for our clients. The FAQ has the short answers.
If you own land or have it under contract and your builder has given you a realistic number, the next step is the application. We review your financials and VA eligibility, then schedule a consultation to go through your project and your builder.
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