Choosing To Build From The Ground Up Instead Of Buying An Existing Home
October 11, 2023
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.
Contact Us: Send Us Your Request – Spam Safe
Please send your email request to [email protected] which authorizes OneTimeClose.com to share your personal information with one mortgage lender licensed in your area to contact you. No SSN required • No credit check • 100% free to get started
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.
With 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. Compare this to conventional purchase loans; the advantages are clear for some applicants. But if you don’t want to buy someone else’s property, is there an answer for you?
Advantages of Building Your Home From The Ground Up
With an FHA or VA purchase loan, you can purchase someone else’s home or you can build a brand new house from the ground up.
But when you build instead of buying, you eliminate some of the hassles associated with buying existing construction. For example, you won’t have to worry about the age of the roof or plumbing systems with a newly built house.
Advantages Of A One-Time Close Construction Loan
While it’s true that you have to wait til the builders are finished before you can move into your new home, what you DO NOT have to do is to compete with other borrowers for a specific home. You don’t even have to worry about the configuration of such a property since, with a construction loan, you have a lot of say over the design and materials.
Down Payment Issues?
Existing construction loans don’t require a higher down payment to build instead of buy. This may not be true of conventional mortgages, but where VA and FHA single-close loans are concerned, there is no FHA or VA requirement to pay more at closing time for the downpayment.
Conventional construction loans may require a 20% downpayment depending on the lender, your financial qualifications, and other variables.
Is There An Upside To Buying Existing Construction?
If you don’t feel you have the time to wait out the construction process on a One-Time Close mortgage, buying an existing house makes sense.
After all, it’s possible to occupy the house much faster, and you may also consider haggling with the seller to get some of your closing costs paid for (up to six percent of the sale price) as a seller concession. You can’t do that with a construction loan.
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. Compare this to conventional purchase loans; the advantages are clear for some applicants. But if you don’t want to buy someone else’s property, is there an answer for you?
Advantages of Building Your Home From The Ground Up
With an FHA or VA purchase loan, you can purchase someone else’s home or you can build a brand new house from the ground up.
But when you build instead of buying, you eliminate some of the hassles associated with buying existing construction. For example, you won’t have to worry about the age of the roof or plumbing systems with a newly built house.
Advantages Of A One-Time Close Construction Loan
While it’s true that you have to wait til the builders are finished before you can move into your new home, what you DO NOT have to do is to compete with other borrowers for a specific home. You don’t even have to worry about the configuration of such a property since, with a construction loan, you have a lot of say over the design and materials.
Down Payment Issues?
Existing construction loans don’t require a higher down payment to build instead of buy. This may not be true of conventional mortgages, but where VA and FHA single-close loans are concerned, there is no FHA or VA requirement to pay more at closing time for the downpayment.
Conventional construction loans may require a 20% downpayment depending on the lender, your financial qualifications, and other variables.
Is There An Upside To Buying Existing Construction?
If you don’t feel you have the time to wait out the construction process on a One-Time Close mortgage, buying an existing house makes sense.
After all, it’s possible to occupy the house much faster, and you may also consider haggling with the seller to get some of your closing costs paid for (up to six percent of the sale price) as a seller concession. You can’t do that with a construction loan.
FHA, VA, and USDA: One-Time Close LoansWant 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.
Contact Us: Send Us Your Request – Spam Safe
Please send your email request to [email protected] which authorizes OneTimeClose.com to share your personal information with one mortgage lender licensed in your area to contact you. No SSN required • No credit check • 100% free to get started
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.
See Your Credit Scores From All 3 Bureaus
Do you know what's on your credit report?
Learn what your score means.
Articles, Updates, and Guidelines
One-Time Close Construction Loans Versus Two-Close Loans
November 1, 2024There is a mortgage loan option that lets you build a house from the ground up on land you own or purchase in conjunction with the loan. The One-Time Close loan is the mortgage you want to ask the lender for to build a home from the ground up instead of buying someone else's dream home.
Build On Your Lot in Georgia with an FHA or VA Construction Loan
October 29, 2024Residents in Georgia are finding out that they can utilize these low-down payment construction programs in order to build a new home with the same underwriting guidelines and qualifications as if they were purchasing a resale. Learn more about One-Time Close construction mortgages.
One Time Close Mortgages 101
October 26, 2024The Federal Housing Administration (FHA) offers a range of mortgage loan options including the ability to build your home from the ground up. The FHA One-Time Close Construction Loan streamlines the process by combining construction financing and the FHA mortgage into a single loan.
