If you already own the land you plan to build on you may not have to make a cash down payment. In fact you may be able to roll in any closing costs and/or pre-paids. Land equity comes in three forms;
1) You have your land gifted to you. We will need sale comps of similar properties but you can use the entire value of the land as a credit against your down payment, closing costs and pre-paids.
2) You purchased your land in the last 6 months. You will be credited for any funds that you used to outright purchase the land or used for a down payment. It’s as if you brought these funds to the closing.
3) You purchased your land over six months ago and it has appreciated. You can use any money you put down plus the appreciated value against your down payment and closing costs.
The VA is a little different. For some odd reason the VA does not allow vets to use land equity when it comes to rolling in closing costs. The work around is to have your builder agree to pay these costs and simply increase the contract to build price to cover the costs.
Give me call on my cell and we can talk about your situation.