The VA home loan is a great benefit to all veterans! The VA does allow new construction, but finding a lender to do it is the hard part. The reasoning behind that, is because the VA loan is 100% financing, most construction loans require a down payment and lenders will not do a construction loan without any money down. The best thing to do if you are looking to build a home is to first get a construction loan, then once the home is complete you can refinance into a VA home loan for your permanent financing.