One-Time Close Expenses You Should Plan For
If you want to build a home from the ground up, there are costs to think about as early as possible in the planning stages. Anticipate these expenses for best results when building your house with a One-Time Close construction mortgage.
Buying Land To Build Your House On
Using an FHA or VA One-Time Close construction loan to build a house from the ground up often means buying land to build the house.
If you don’t have your own land at application time, you can discuss adding loan funds to do so when the time is right. But be sure to ask the lender how much the land purchase will increase the monthly mortgage payment amount.
Local Permits and Fees To Build The House
When you build or remodel, you are typically required to have the appropriate permits. Paying for a permit means you agree to build the house to state and local building code requirements and compliance inspections may be required once the work is done.
Construction Loan Compliance Inspections
Once you finish building, the local code authority may require you to have a code compliance inspection. Such inspections are different from appraisals or home inspections, and you will need to budget and save for all three to be fully prepared for the loan and the construction phase of it.
Demolition Costs Associated With Buying Land
Did you buy a plot of land with a structure on it that needs to be removed? Is there a house on the land which needs to be torn down?
What about outbuildings or accessory dwelling units? All of these may require outside help to get rid of, and the costs associated with such work should be included in your overall budget for the construction loan.
Living Expenses During The Construction Phase
You won’t be able to occupy the home until the construction phase of the loan is complete. Some already own homes to live in and may keep those properties until the project is finished.
But not everyone has the luxury of doing so, and if you need to continue paying rent in the meantime, be sure to consider your living expenses as they relate to your home loan costs in the construction phase of the loan.
You may have already thought of this if you are already paying rent or a monthly mortgage payment. But what about those who want to buy a home but currently live with parents or roommates? It’s an expense you’ll want to include in your planning in any circumstance.
FHA, VA, and USDA: One-Time Close Loans
Want More Information About One-Time Close Loans?We have done extensive research on the FHA (Federal Housing Administration) and the VA (Department of Veterans Affairs) One-Time Close Construction loan programs. We have spoken directly to licensed lenders that originate these residential loan types in most states and each company has supplied us the guidelines for their products. We can connect you with mortgage loan officers who work for lenders that know the product well and have consistently provided quality service. If you are interested in being contacted by a licensed lender in your area, please send responses to the questions below. All information is treated confidentially.
OneTimeClose.com provides information and connects consumers to qualified One-Time Close lenders to raise awareness about this loan product and to help consumers receive higher quality service. We are not paid for endorsing or recommending the lenders or loan originators and do not otherwise benefit from doing so. Consumers should shop for mortgage services and compare their options before agreeing to proceed.
Please note that investor guidelines for the FHA and VA One-Time Close Construction Program only allows for single family dwellings (1 unit) – and NOT for multi-family units (no duplexes, triplexes or fourplexes). In addition, the following homes/building styles are not allowed under these programs, including but not limited to: Kit Homes, Barndominiums, Log Cabin Homes, Shipping Container Homes, Stilt Homes, Solar (only) or Wind Powered (only) Homes, Dome Homes, Bermed Earth Sheltered Homes, Tiny Homes, Accessory Dwelling Units, or A-Framed Homes.
All known FHA/VA One-Time Close Lenders known to our company will not allow a borrower to act as their own contractor, whatsoever. There cannot be self-builds, relative builds, or employer builds.
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1. Send your first and last name, e-mail address, and contact telephone number.
2. Tell us the city and state of the proposed property.
3. Tell us your and/or the Co-borrower’s credit profile: Excellent – (680+), Good - (640-679), Fair – (620-639) or Poor- (Below 620). 620 is the minimum qualifying credit score for this product.
4. Are you or your spouse (Co-borrower) eligible veterans? If either of you are eligible veterans, down payments as low as $0 may be available up to the maximum amount your debt-to-income ratio per VA will allow – there are no maximum loan amounts as per VA guidelines. Most lenders will go up to $1,500,000 and review higher loan amounts on a case-by-case basis. If not, the FHA down payment is 3.5% up to the maximum FHA lending limit for your county.
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February 20, 2025Imagine you’re building a house. Traditionally, you'd get one loan for the construction, then another to buy the finished house. An One-Time Close construction loan (also known as an OTC mortgage) simplifies this. It's a single loan that covers both the construction and the final mortgage. You close just once, hence the name. Government programs like FHA, VA, and USDA offer these options to qualified applicants.
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