Learn About FHA and VA Construction Loans
Find out how you can build a home on land you already own.
If you've decided to have your new home built from scratch, you might be wondering how to finance the construction and purchase. This Single Close Loan gets you from construction to occupancy with one mortgage in a streamlined process.
PDF Download: One-Time Close 101
Low Down Payment Loans Available
The One-Time Close Loan is a mortgage program that finances the construction, lot purchase, and permanent loan of a new home, all wrapped up in a single mortgage with a single closing.
Previously, most construction loans required two separate closings, as well as a re-qualification process. The One-Time Close Loan helps you avoid the extra step, saving you time and money. And with Single Close Loans available through the VA and FHA, having your new home built on your own land is easier than before!
October 11, 2023With a government-backed purchase loan such as an FHA or VA home loan, your low downpayment options include no money down for VA mortgages and 3.5% of the price of the home for FHA mortgages. With the FHA version of a government-backed home loan, there are no early payoff penalty issues for those who decide to refinance later to try to get into a better interest rate.
October 4, 2023It’s a common question. “How much is my mortgage payment on a One-Time Close home loan?” The answer isn’t as simple as providing a dollar amount, as we will explore. A more important question for many construction loan applicants? “How much of my monthly income will my mortgage require?”
September 27, 2023If you have only purchased existing construction before or are a newcomer to buying a home in general, you might not know about some of the rules unique to construction loans. How does building differ from buying? There are a few important differences.
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Non-Allowable Properties
The following home property types are excluded from the program, meaning that you won't be able to use the One-Time Close loan for financing:
Kit Homes
Steel framing kits for metal buildings that are assembled on site.
Barndominiums
Metal structures that combine living quarters with traditional barn space.
Log Cabin Homes
Pre-cut kits for log buildings that are assembled on site.
Shipping Container Homes
A dwelling made from a steel container otherwise used for shipping
Stilt Homes
Houses raised on piles over land or a body of water.
Solar Only or Wind Only Powered Homes
Homes that are powered on-site solely by solar panels or solely by wind turbines.
Dome Homes
Homes made in the shape of a sphere utilizing shell framework.
Bermed Earth Sheltered Homes
Homes with earth (soil) against the walls, roof or buried underground.
Tiny Homes
Homes that are 600 square feet or less.
Accessory Dwelling Units
Additional living quarters that are independent of the primary dwelling.
A-Framed Houses
Building with a tall triangular roof that resembles the letter A.
The primary reason for these exclusions is that all non-regular homes are considered unique properties and hard to get comps for under VA and FHA. These homes require specialized construction techniques, making it even more important that a single builder starts and finishes a project. If the builder were to quit before a job is finished, the lender would need to step in and find a replacement. This can be more difficult than usual due to the specific nature of the work.
