Financing
Lender Incentives, Zero Down and Low Down Payment Loans, Creative Financing Alternatives
Using Our Preferred Lender
Any consumer or customer is always free to choose any lender or lending institution they prefer for their project. However, we have taken the time and effort to put together various packages and resources that can be very beneficial to someone looking to build a new construction home. This includes the VA and FHA One-Time Close Loans described below.
If you choose to use our preferred lender, our mortgage lender has agreed to apply a portion of their mortgage commission to buy down the interest rate (usually with conventional loans) for those desiring to build with Red Clover Homes. Because the rates and buy downs vary on a daily basis, we are not able to provide those terms here. However, at the time of engagement in the process, details and quotes can be generated to provide a meaningful measure of this benefit.
Currently our preferred lender is offering up to a 0.45% interest rate buydown towards your long-term financing.
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Build a Brand-New Home With $0 Down
0% Down Payment VA Loans – This is a VA One-Time Close Loan program we at Red Clover Homes have put together for our potential clients that requires no down payment for neither the construction loan nor the long-term loan for eligible Veterans. Once the one-time loan is approved, construction can begin right away, including purchasing 100% of the building lot.
This isn’t a common program, and it’s not something you’ll find everywhere. It works because we’ve intentionally structured our process, partners, and builds around it.
So, What Is a VA One-Time Close Loan?
In short—it keeps things simple.
Instead of juggling a construction loan and a permanent mortgage, this program combines everything into one single VA-backed loan.
That means:
• No down payment
• One loan
• One closing
• One approval process
• One long-term mortgage from day one
From breaking ground to move-in day, the financing stays clean, predictable, and straightforward—just the way it should be.
Is This Program a Good Fit for You?
This option is ideal if you:
• Are an eligible Veteran, Active-Duty service member, or VA-qualified buyer
• Want to build a new home designed around your needs
• Don't want to settle for a resale designed around someone else's ideas
• Prefer to keep your cash instead of putting money down
• Like the idea of less paperwork, fewer surprises, and one clear path forward
Build New. Close Once. Move In Confidently.
With Red Clover Homes’ VA One-Time Close Construction Loan package, you can:
• Design and build a brand-new residential home
• Finance construction and your permanent mortgage together
• Lock in your long-term loan early
• Move forward with no down payment required
It’s a smarter, more streamlined way to build—and one we’re proud to offer to those who’ve served.
If you’re VA-eligible and thinking about building a new home, we’d love to walk you through how this works and explore if it’s right for you.
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A brand new home with a 3.5% Down Payment FHA Loan
The FHA One-Time Close Loan works exactly like the VA One-Time Loan described above with the exception that FHA requires a 3.5% down payment. However, if you already own or are under contract with a building lot that has enough equity to show 3.5% equity in the entire the project (the lot and the new home combined), you would also then qualify to build with no addition down payment requirements. Most People that purchased a lot with a 20% down payment for the lot and are carrying the balance of the lot with an existing loan would already satisfy FHA’s total equity requirement of 3.5%. Any existing loans on a building lot would simply be paid off with the proceeds of the first draw of the construction loan as the building process begins.
An FHA loan may be more beneficial than a conventional loan due to potentially better interest rates and more generous loan qualifying terms.
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Conventional Loans
There are various conventional loan options readily available for someone wanting to build a new home. There is also no requirement to couple the construction loan and long-term loan together when using conventional loans although that is still an option. These loans types are abundant and fairly easy to get qualified for people with decent credit and enough income for the type of home they are wanting to build.
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Non Conforming Conventional Loans (low down payment and/or less attractive credit)
We have also worked behind the scenes to put together other non-conforming conventional loan options that also allow for low down payment options and less than stellar credit. These programs have guidelines similar to the the VA/FHA programs described above with the exception that these conventional loans allow for greater loan amounts (non-conforming jumbo loans). These kind of loans usually carry a higher interest rate but still may be right for someone looking to build right away and refinance with better terms down the road.
Existing equity can also be used as down payment options for these types of loans.
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Private In-house Construction Lending
We have various private lenders willing to provide construction financing (including building lots) with the primary requirement being that the borrower qualifies for long-term financing upon the completion of the new home. Some traditional construction lenders may require the sale of a client’s current home before approving them for a construction loan, thus making the transition from your current home to your new construction home untimely and more complicated than it would be otherwise.
So, this may be a great option for those looking to use the equity in their current home for their new construction home, at a time much closer and convenient - sometimes even right at the time of the completion of the new construction home. Also, with some of these options, construction interest payments may be delayed or deferred altogether and then wrapped into the long-term loan to help manage cash flow and keep one single payment throughout the build.
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Using an ADU to Help Qualify
Over the past several years, Fannie Mae and Freddie Mac have adjusted their guidelines to put their support behind the financing of ADU’s (Accessory Dwelling Units). This also applies to brand new construction. You can now finance the Primary Residence and an ADU at the very beginning of the construction process, when it financially makes sense. We have put together winning combinations using pre manufactured home ADU’s, finished basement ADU's and detached garage/ADU combos to go along with the traditional construction of the Primary Residence.
This may help some people qualify for financing that they otherwise may not qualify for as the borrower is able to count the potential rental income of the unbuilt additional unit in their income. Best of all, project owners may choose to live in the ADU and rent the primary residence to show greater rental income and then later move into the primary residence when finances allow for that transition. Either way, you get a chance to create a rental income stream that may be beneficial for years to come.
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Want more info or to discuss your specific situation? Let's explore together!