Using a VA loan for new construction in Hampton Roads lets you negotiate concessions that most buyers never ask about. Builders in this market are sitting on inventory and motivated to close deals, which puts you in a stronger position than you've been in years.
What Builder Incentives Look Like With a VA Loan
The VA limits seller-paid concessions to 4% of the purchase price. On a $450,000 home, that's $18,000 a builder could put toward closing costs, prepaid taxes and insurance, or a rate buydown. Most buyers don't realize that number applies to new construction too, not just resale.
The most valuable incentive right now is the 2-1 buydown. The builder pays to lower your interest rate by 2% in year one and 1% in year two. On a $450,000 purchase, that drops your first-year payment by roughly $500 to $600 per month compared to your full rate. After two years, you're at your permanent rate, but you've had time to settle in and build savings.
Builders will also offer closing cost credits, free upgrades, or a combination. The key is knowing which ones actually save you money. Rate buydowns and closing cost credits put cash in your pocket. A free upgrade package on countertops doesn't.
How to Negotiate in Virginia Beach and Across Hampton Roads
Think of it the same way you'd buy a car at the end of the month. The sales rep has a quota. The builder has carrying costs on every unsold home. You have a pre-qualified VA loan, which to a builder is as close to a guaranteed close as they can find. That's leverage.
Ask directly for the rate buydown first, then closing cost credits. Don't let the builder redirect you to an upgrade package before you've pinned down the financial concessions. Get the dollar amount of the incentive in writing before you talk square footage or finishes.
One more thing: the VA appraisal on new construction works a bit differently than on resale. The VA appraiser reviews the plans and specs before construction is complete. Your lender needs to order that appraisal early. Don't let the builder's preferred lender timeline catch you off guard.
What This Means For You
• A 4% concession on a $500,000 new build equals $20,000 the builder can apply to your costs
• A 2-1 buydown on a 30-year VA loan can save $8,000 to $12,000 in the first two years alone
• VA loans carry no down payment requirement and no private mortgage insurance, which compounds your savings when combined with builder concessions
• The VA funding fee can sometimes be rolled into the loan, and veterans with a service-connected disability rating may be exempt from it entirely
2026 is a window. Builders across Hampton Roads are negotiating. Most buyers using conventional financing can't match what you bring to the table with a VA loan. Use it.
For more on financing options across the region, browse the Legacy Home Search blog.
Frequently Asked Questions
Can a builder refuse to work with VA loans on new construction?
Builders can set their own terms, but most large and mid-size builders in Hampton Roads accept VA financing because the loan guarantee makes closings more reliable than many conventional deals. If a builder declines VA loans outright, that's worth knowing early so you don't waste time on that community.
Does the VA 4% concession limit include the rate buydown cost?
Yes. The VA counts all seller-paid concessions toward the 4% cap, including the cost of a rate buydown. Your lender can help you structure the request so you're getting the highest-value combination within that limit before the builder offers upgrades instead.
How does the VA appraisal work when the home isn't built yet?
For new construction, the VA can complete a staged appraisal based on the builder's plans, specs, and a construction timeline. The home must meet VA Minimum Property Requirements when complete, and a final inspection is required before closing. Work with a lender experienced in VA new construction loans so this process doesn't delay your settlement date.
Related reading
• USDA Loans in Hampton Roads: The $0-Down Mortgage Most Buyers Overlook
• Bayport Credit Union Financial Tips Every Hampton Roads Homeowner Should Know