One-Time Close Loans | FHA, VA, and USDA
Learn all about the VA, USDA, and FHA versions of the One-Time Close Loan.

The FHA has a maximum mortgage amount that it will insure for One-Time Close loans. This is known as the FHA lending limit and it change from one county to the next.

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VA Loan - One-Time Close Construction Loan
FHA Loan - One-Time Close Construction Loan
USDA Loan - One-Time Close Construction Loan

The "FHA" One-Time-Close Loan

Single Close Loans allow you to wrap up the financing of lot purchase, construction and permanent mortgage into one loan insured by the FHA. Under this option, you can apply for a 15- or 30-year loan with a fixed rate that’s locked in before construction on your new home begins.

With a Single Close Loan comes a single set of closing costs. These costs can be partially paid for you, since the FHA allows interested party contributions (sometimes referred to as seller concessions, although commonly paid by the builder in the case of a construction-to-permanent loan) up to 6 percent of the total acquisition cost.

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"The FHA has a maximum loan amount that it will insure, which is known as the FHA lending limit. These loan limits are calculated and updated annually."

What is an FHA Loan?

Beaver talks about One-Time Close loansThe Federal Housing Administration (FHA) is a government agency within the U.S. Department of Housing and Urban Development (HUD). In an effort to stimulate America’s housing market and assist Americans in securing safe and affordable housing, the FHA insures mortgages on single and multifamily homes.

The FHA offers homebuyers a number of mortgage options, including the One-Time Close Construction-to-Permanent loan. The loan is provided by private, FHA-approved lenders and is backed by the FHA, giving lenders peace of mind about approving borrowers for large mortgages.

Who Can Apply

While only veterans and rural residents can apply for loans with the VA and USDA respectively, securing a Single Close Loan with the FHA is easier for other homebuyers. It also allows you to take advantage of the FHA’s lenient borrower guidelines.

There is a low down payment requirement of 3.5 percent. If you already own the land on which your new home is being built and have equity in the land, the equity can be used towards the 3.5% down payment. Furthermore, the down payment can be paid for entirely with "gift funds."

Most lenders typically have a credit score requirement of at least 620. The FHA also requires proof of employment and income, and no late or missed payments in the last 12 months.

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OTC articles
Five One-Time Close Construction Loan Tips

If you want to build a home on your own lot instead of buying an existing house, the FHA One-Time Close construction mortgage is an option to consider. FHA construction loans feature the same low down payment requirements (3.5% for qualified borrowers) as any other FHA mortgage. 

Which Construction Loan Should I Apply For?

The most important thing to know about VA One-Time Close construction loans is that unless you are either an eligible veteran with qualifying military service or a qualifying surviving spouse of a veteran who has died as a result of military service.

One-Time Close Mortgages: Fact and Fiction

There are several different types of One-Time Close loans, also known as single-close construction loans. You can apply for an FHA One-Time Close construction loan, there is a VA equivalent, and even a USDA construction loan. Construction loans are available for any financially qualified borrower.


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