Blog · 2026-10-29

Construction Loan Requirements in Virginia

Illustration: a building lot with rolling Virginia Piedmont hills with the Blue Ridge in the distance, survey stakes marking the house pad, a septic test pit, and a permit board on a post.

Last updated: October 29, 2026. State rules checked against the primary sources listed at the end of this guide.

To build with a construction loan in Virginia, you generally need a DPOR-licensed contractor, a building permit under the 2021 Uniform Statewide Building Code, a VDH onsite sewage permit if there's no sewer, Bay Act review for lots in Chesapeake Bay Preservation Areas, and a flood-zone check. Your lender adds its own credit, appraisal, and draw requirements.

Here's what each step looks like in Virginia, with links to the state sources.

Key takeaways

Builder: DPOR license; owner exemption for one primary residence per 24 months.
Code: 2021 USBC, effective January 18, 2024.
Site: VDH onsite sewage permit; Bay Act review in covered localities.
Liens: memorandum within ninety days after the month of last work.
Closing: settlement agents; recordation tax on the deed of trust.

What are the requirements at a glance?

Requirement	Virginia rule	Where to check
Contractor license	DPOR Board for Contractors	DPOR
Owner exemption	One primary residence for own use per 24 months	Va. Code § 54.1-1101
Building code	2021 USBC, effective January 18, 2024	Local building department
Septic and wells	VDH onsite sewage program	Local health department
Bay Act lots	Plan-of-development review in 84 localities	Local Bay Act program
Mechanics' liens	Ninety days after the month of last work; optional lien agent	Circuit court clerk
Closing	Settlement agents (attorneys or title agents)	Your settlement agent
Lender licensing	SCC Bureau of Financial Institutions	NMLS Consumer Access

What do lenders require for a construction loan?

Most construction lenders look for:

A credit, income, and asset review, much like a regular mortgage
Enough equity, from cash, land you own, or both. See how land equity works.
An approved builder with a license or registration, insurance, and references. See builder approval.
Plans, specifications, and a line-item budget, often with a contingency line
An "as completed" appraisal of the lot and finished home together
Title work, a survey, and insurance, including builder's risk during construction
Reserves for cost overruns, depending on the lender

Requirements vary by lender and loan program. FHA, VA, USDA, and conventional loans each have their own rules.

Does my builder need a license in Virginia?

Yes. Contractors in Virginia are licensed by the Board for Contractors at the Department of Professional and Occupational Regulation (DPOR) (DPOR Board for Contractors; Va. Code ch. 11, title 54.1). Check the license class and status before you sign.

Virginia exempts a person who builds or supervises construction of no more than one primary residence they own, for their own use, in any 24-month period (Va. Code § 54.1-1101). Many lenders still won't finance an owner-builder. Read more about owner-builder construction loans.

Which building code applies in Virginia?

Virginia's Uniform Statewide Building Code (USBC) applies statewide, and the 2021 edition took effect January 18, 2024 (Virginia DHCD, codes). Your local building department issues permits and inspects.

Do I need a septic permit in Virginia?

If there's no sewer, yes. The Virginia Department of Health oversees onsite sewage systems and private wells, usually through your local health department (VDH, onsite sewage and water services). Lenders usually want the permit before the first draw.

What about the Chesapeake Bay Act and flood zones in Virginia?

Check your lot on the FEMA Flood Map Service Center. If the home sits in a high-risk flood area, the lender will generally require flood insurance. In the 84 localities covered by the Chesapeake Bay Preservation Act, lots in Chesapeake Bay Preservation Areas go through a plan-of-development review before a building permit is issued (Virginia DEQ, Chesapeake Bay Preservation Act).

How are construction loan closings handled in Virginia?

Virginia closings are run by settlement agents, who may be attorneys or title agents, under the state's Real Estate Settlement Agents Act (Va. Code title 55.1, ch. 10). A recordation tax applies when your deed of trust is recorded (Va. Code § 58.1-803).

How do mechanics' liens work in Virginia?

In Virginia, a memorandum of lien generally must be recorded within ninety days after the last day of the month in which the claimant last worked, and no later than 150 days after the building is completed (Va. Code § 43-4). Owners can name a mortgage lien agent on the building permit, and claimants then must notify that agent to keep certain lien rights (§ 43-4.01; § 36-98.01). Lenders collect lien waivers as each draw is paid.

Are there state homebuyer programs for building in Virginia?

Virginia Housing offers homebuyer programs through participating lenders (Virginia Housing). Ask whether a program can be used with new construction before you plan around one.

How do I check that a lender is licensed in Virginia?

Search the lender and loan officer on NMLS Consumer Access. The State Corporation Commission's Bureau of Financial Institutions licenses mortgage lenders, brokers, and loan originators (Virginia SCC, regulated financial institutions).

What are the steps to build in Virginia?

Confirm the lot can be built on: access, zoning, flood zone, and septic or sewer.
Choose a qualified builder and get plans, specs, and a line-item budget.
Compare lenders and get a Loan Estimate for your project.
Apply. The lender reviews you, your builder, and the plans, and orders an appraisal.
Get the VDH septic permit (if needed), any Bay Act review, and the building permit, and decide whether to name a mortgage lien agent.
Close with your settlement agent and record the deed and deed of trust with the circuit court clerk.
Build. The lender pays the builder in draws after inspections. You pay interest on the money drawn so far.
Pass the final inspection and get a certificate of occupancy.
The loan converts to your permanent mortgage. See what happens at conversion.

Where can I learn more?

Comparing lenders? Read how to choose a construction-to-permanent lender in Virginia or see our list of Virginia construction loan lenders. Building somewhere else? See our construction loan guides by state.

Frequently asked questions

Can I be my own builder in Virginia?

Virginia exempts one primary residence you own and build for your own use in any 24-month period. Many lenders still won't finance an owner-builder.

Which building code applies to a new home in Virginia?

The 2021 Uniform Statewide Building Code, effective January 18, 2024.

Who approves a septic system in Virginia?

The Virginia Department of Health, usually through your local health department.

What is a mortgage lien agent in Virginia?

An agent the owner can name on the building permit. Claimants then must notify that agent to keep certain lien rights.

Does the Chesapeake Bay Act affect building lots in Virginia?

In the 84 Bay Act localities, lots in Chesapeake Bay Preservation Areas go through a plan-of-development review before a building permit is issued.

Sources

Ready to build in Virginia?

Tell us about your lot, your builder, and where you are building. Get connected at My Construction Path, and we'll connect you with lenders who offer construction financing in Virginia.

My Construction Path is not a lender and does not make loans or credit decisions. Not all borrowers will qualify. Equal Housing Opportunity. Requirements vary by lender, loan program, and location. This article is for general education and is not a commitment to lend. It is not a quote of rates, payments, or loan terms.