Louisiana
Louisiana VA One-Time Close Construction: The Honest Version
Hurricanes, flood insurance and tougher building codes all push Louisiana build costs up, and the appraisal has to keep pace. Here is what that means for a VA one-time close.
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Three costs other states do not stack this high
Louisiana is not a casual place to build with a VA one-time close loan. Hurricane risk, flood insurance requirements and building code demands all add to what the house costs to put up. None of that is a reason to skip it. It is a reason to run the math before you fall for a lot.
The math works like this. A VA appraiser values the home from plans and specs, using VA Form 26-1852, and issues a Notice of Value. The finished home has to appraise for the Total Acquisition Cost, which is lot plus build plus contingency plus accrued interest plus the funding fee. Every dollar of storm-driven construction cost lands in that total. If local comps do not reflect those costs, you end up with a gap you have to solve before closing.
Also stated plainly: Home Loans Inc is not licensed in Louisiana and cannot take your application. Use this page to prepare for a conversation with a Louisiana-licensed lender.
Region by region, from the bayou to the piney woods
Fort Johnson and Leesville
The post formerly known as Fort Polk, home of the Joint Readiness Training Center, sits in one of the toughest VA one-time close markets anywhere. It is rural and the comps are very thin. DeRidder and Leesville buyers should expect the appraiser to struggle to find matches for a new custom home, and should keep plans modest.
Shreveport and Bossier City
Barksdale AFB and its B-52 wing anchor an affordable market with moderate comps. This is one of the friendlier places in the state to make the numbers work.
New Orleans metro
Near NAS JRB New Orleans in Belle Chasse, the market is unique. Flood zones and hurricane considerations shape both insurance and construction, so expect your lender to look hard at both.
Baton Rouge
The capital, with moderate comps and a broad enough market to support a sensible plan.
Lafayette
An oil and gas economy and a moderate market. Ask how recent sales look rather than relying on older numbers.
Lake Charles
Still rebuilding after hurricanes, so the picture is mixed. New construction may help comps, but the data can be uneven.
Pineville
Camp Beauregard and the Louisiana National Guard sit here. Ask your lender which nearby sales an appraiser would lean on.
Closing in a civil-law state
Louisiana runs on civil law, and closings feel different. A mortgage on real estate is executed as a notarial, or authentic, act before a notary and two witnesses who are not the notary, and that notary is often an attorney. Louisiana is also a community-property state. Our notes on refinancing say both spouses generally must concur on the family home or community property unless the home is the borrower's separate property, so if you are married, expect the question of who signs to come up early and get a clear answer from your closing attorney. Louisiana does not impose a mortgage recording tax, so recording runs on flat fees. Foreclosure is judicial, through executory process.
Before you sign a Louisiana lot contract
Price the storm costs
Step one
Ask builders to price code and wind requirements into the plan up front. Then plug the real total into the cost estimator.
Check the land
Step two
Flood zone status and site conditions change both cost and insurance. Read the land guide before you commit.
Vet the builder
Step three
The builder must be VA-registered with a VA builder ID. The builder approval page covers what that takes.
Know your fee
Step four
The funding fee is 2.15 percent at first use and 3.3 percent after at zero down, waived with VA disability compensation. Many lenders want about a 660 score.
Louisiana VA OTC questions
Why is building near Fort Johnson harder than building near Barksdale?
Fort Johnson sits in a rural area around Leesville and DeRidder with very thin comps, so an appraiser may not find enough similar new homes to support your cost. Shreveport and Bossier City near Barksdale are affordable with moderate comps, which gives a VA appraisal more to work with.
Do I really need two witnesses at a Louisiana mortgage closing?
Yes. Louisiana is a civil-law state, and a mortgage is signed as an authentic act before a notary and two witnesses who are not the notary. The notary is often an attorney. Your closing office will normally arrange the witnesses, but confirm that ahead of time.
How do hurricane and flood rules affect a VA construction loan in Louisiana?
They add cost. Building code demands, hurricane considerations and flood insurance requirements all push up what the home costs, and that cost flows into the Total Acquisition Cost the finished home must appraise for. If local comps lag those costs, the appraisal can fall short.
Will my spouse have to sign since Louisiana is a community-property state?
Very possibly. In Louisiana both spouses generally must concur on dealings with the family home or community property unless the home is one spouse's separate property. Ask the Louisiana-licensed lender and closing attorney how they will handle signatures for your loan.