e. Construction Loans

The lender can charge an additional flat charge on construction, alteration, improvement, or repair loans.

·   If the lender supervises the progress of construction and/or makes advances to a veteran in excess of 50% of the loan during construction, alteration, improvement, or repair

·   then the lender may charge the veteran up to 2% of the loan amount in addition to the lender’s 1% flat charge. 

·   Example:  Total charges to the veteran in these cases would be, at a maximum, itemized fees and charges plus a 3% flat charge plus discount points.

·   If the lender does not supervise the progress of construction or make advances to a veteran in excess of 50% of the loan during construction, alteration, improvement, or repair

·   then the lender may charge the veteran up to 1% of the loan amount in addition to the lender’s 1% flat charge.

Example:  Total charges to the veteran in these cases would be, at a maximum, itemized fees and charges plus a 2% flat charge plus discount points.

This provision also applies to supplemental loans.