What’s New With VA Loans And Builders?

What's going on everyone. There's been a big update with the VA home loan when it comes to builders. So prior to just the other month, builders are required to get what's called a builder ID number. They basically submit information about themselves, their experience, insurance, anything else that's related to them, to the VA, and then the VA issues them an ID number. Now where that's relevant is when you want to build a home using that amazing home loan builder needs to have that. Now, biggest advantage for small builders is they typically didn't have that VA approval. And this also helps with the VA renovation loan as well, because you can do a renovation with the VA loan. Although there may be some other options you might want to explore, but if you guys are interested in that, drop a comment down below and I can create a whole video just talking about renovation loans and the different options that exist. So when it comes to this builder identification number, let me share the circular that just came out because you might be running into this issue with a lender or just in your own journey to become a homeowner. And by the way, guys, I am a loan officer. So if you're interested in using the VA loan, please schedule a call with me down in the description below, and I'll also drop a comment. All right. So the VA circular 26-25-1 was issued on March 31st of 2025. So basically this is like what I said, eliminating elimination of builder identification number for certain VA guaranteed loans and updates to builder complaint process. And I'm sure there's a lot of complaints going on with builders. Uh, so that's why it's so important to do your research, right? Just because you are working with a big developer doesn't mean that they're producing quality product, right? This is just a conversation we're having because you really need to understand that we'll have people come back and say, uh, well, I'll say with a lot of renovations that we've seen done and people, veterans coming in and buying them, home inspections have typically just annihilated them because they don't, they skip court, they cut corners. Uh, they don't do what they're supposed to, but they somehow still pass building and zoning. So important things to understand. Uh, one thing to note, uh, that I want to point out here, right? So in the VA handbook, it references pretty much everywhere that a builder needs to have a builder identification number to issue, uh, in today's world. Well, I guess not anymore, but to issue an appraisal, you need to have what's called a notice of value. That's basically a special type of underwriter at a bank that issues that once they've cleared the appraisal. Um, typically like when you have a VA condo approval, you need to have the VA condo approval ID number to issue that NOV and up until March 31st, you needed to have a builder ID number, right? And again, that was in the V's portal. All of that is kind of gone. A couple of things to reference in February of 2026, the VA ceased, uh, compliance inspections for new and proposed construction properties secured by VA guarantee loans, relying instead on local building inspectors. Inspections and construction warranties of one to 10 years. Obviously the longer the warranty you get, the better it is for you. We've kind of seen this all over the place, right? Uh, it just really depends on the builder, your area, all of that. So despite the significant change VA did not update its process related to how VA employees were to handle veterans complaints related to construction, leaving many veterans with the impression that VA has authority to compel builders to correct construction defects or other issues. This is part of a broader, I would say. Uh, challenge because a lot of people think that, Oh, the VA is guaranteed alone, I can call them and they can basically fix anything with a snap of a finger, but that's not true. I mean, majority of the time, the V is not the one that originates the loan. It is the individual bank broker, whatever that is originating that mortgage. Okay. So same thing with the builder. Like, yes, the VA, uh, proves the builder up until now. Right. Uh, and then people thought, well, they have control over them to be able to make any corrections that they need to. They don't. And this is why kind of what I said earlier, it's so important to do your own research on the builder. So you can get all of that information up front and any warranties that they may have, because all of that's going to make a big impact at the end of the day. Like if things are going wrong in your home, uh, you have an idea. And that also reminds me, make sure you get a home inspection. It is my personal opinion because the VA doesn't require it. They encourage you. But again, you might be thinking, well, as a new construction, why do I need a home inspection? Trust me, you don't, uh, because, and you want to be there for sure. Uh, because they're going to point out any defects, any corners they cut. That way you have an idea of what was built before you finalize everything with this. So again, this just says in section four, the A to get rid of it. A builder still needs to, uh, needs to meet the state and local licensing requirements. So some states have requirements for, let's say GC, others don't. Uh, so just make sure, you know, that now this doesn't affect, uh, builders in the sense of what they do still need a builder ID. If they are going to be processing, especially adapted housing grants or native American direct loans. Let me break those two things down because we're going to do a whole video. Just on the specially adapted housing grant. This is where you can get up to a certain dollar amount. And it's like over a hundred grand. It's, it's kind of wild to do adapt, adapt your house to your disabilities. It's awesome. Uh, and again, we're going to break all that down in a separate video. Now, the other parts of native American direct loan, that's for, uh, native Americans buying on sovereign land. The VA is the one that actually does that loan. Same thing with the specially adapted housing grant. They're the ones that control that outside of that, everything else. Individual private lenders will handle that. Now, when it comes to builder complaints, right? So this could be, you know, whatever complaints you may have about a builder. You're going to then, uh, you can submit that to the VA. The VA can help you with that. And we did a whole video on how to contact the VA. You have a couple of options, right? You can call them, uh, or you can submit a, uh, a ticket to them and get you all your stuff in writing, which is the way I recommend getting your information, uh, because then you have actual paper trail on this process. So you're not up the Creek without a paddle. Not a good thing to be. Um, and then that pretty much wraps up what that, um, circular is. I'm going to drop that circular down below. So you guys have an idea. Uh, let me know if you've thought about building a home or using a VA renovation loan. Uh, and if you've, and if you've done tried it in the past, didn't move forward with it, what stopped you from going through that process? I know that right now, kind of in general, when you talk about, uh, the country, there's still a housing shortage. A new construction, uh, is still can be an option, right? And it's both from a buying a new construction, right? The house is already being built and it's financed through the, uh, builder, right? So you see a lot of those big name companies that kind of do like the cookie cutter homes, big subdivisions. Um, those, you know, they already financed those. So you just buying a new construction home, right? So you just, the end user, you do a deposit down and then you get your loan after the home has been built. The other way is doing a VA construction loan. That's when you are getting a construction loan to finance the build of the home. Two very different things. And I would encourage you to talk with your builder early, like in the first conversation of how they do that process. Typically what I see personally is, uh, the smaller one, or unless you like the really big ones, right, they'll require you to get a construction loan. Uh, they may have an outlet for it, or if you guys hit me up, I can introduce you to some people that do those VA construction loans, uh, that way you have some options when it comes through it. Uh, sometimes builders may have really good incentives to use their lenders and you know, so that's why you have to kind of look at the whole piece. Uh, that's why if you guys reach out to me and schedule a call with me, bounce some ideas off me, I'll tell you like, Hey, this is a good option. Or, you know what? We can do better and we can help you with that process. Uh, so make sure you guys hit the like, subscribe button, share this with the veteran community. Cause the more information we get out there, the better we're off. I'll catch you guys on the next video.