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

- Build a Home on Your Own Lot -
VA Loan - One-Time Close Construction Loan
FHA Loan - One-Time Close Construction Loan

Construction Loans for New Borrowers

Construction Loans for New Borrowers
Did you know that even as a first time borrower, you may be eligible for a One-Time Close construction loan that allows the borrower to build a home on their own lot rather than buying an existing house?

One-Time close loans are available in a variety of low-down payment options for VA borrowers, FHA loans, even construction loans for USDA borrowers. Building a home is more complicated than buying an existing property, but for those who want a home built especially for them, the appeal is strong. For some, no further explanation is necessary to get started--they want to know what to expect from these loans compared to others.

One-Time Close Loans: Lender Requirements Matter

FHA loan rules have minimum FICO score requirements, but your chosen lender may have credit requirements that are higher than for an existing construction mortgage. Keep these potentially higher credit score requirements in mind during the planning stages of your loan; when you work on your credit, you may need a bit more time.

Down Payments

For some types of construction loan (VA construction loans are a good example) there is no VA-required down payment in most typical VA loan cases.

For FHA construction loans, the down payment remains the same for qualified borrowers--the minimum down is 3.5% for an FHA One-Time Close mortgage.

Down payments for existing construction loans may include down payment assistance, but some One-Time Close lenders do not allow down payment assistance for construction loans. Ask first.

Mortgage Expenses, Building Costs

It is good to have a talk with your loan officer about the financial realities of construction loans compared to existing construction mortgages. Some borrowers are keen to reduce up-front costs and may be tempted to cut corners in important places such as hiring the right builder for the job. A contractor who doesn’t have experience doing the scale of work you want may come cheaper, for example, but will cheap labor cost more in the long run?

Only approved builders can work on construction loans for certain government-backed construction loans and while you may technically be able to find more affordable labor elsewhere, that doesn’t guarantee a good job or even a satisfactory one.

Don’t be in a rush with a construction loan; the permitting process alone can take more time than you expect, especially in competitive housing markets where there may be longer processing times due to volume.

Want More Information About One-Time Close Loans?

We have done extensive research on the FHA (Federal Housing Administration), the VA (Department of Veterans Affairs) and the USDA (United States Department of Agriculture) 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. provides information and connects consumers to qualified One-Time Close lenders in an effort 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, VA and USDA 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: Kit Homes, Barndominiums, Log Cabin Homes, Shipping Container Homes, Stilt Homes, Solar (only) or Wind Powered (only) Homes.

Your email to [email protected] authorizes to share your personal information with a mortgage lender licensed in your area to contact you.

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 $750,000 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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Articles, Updates, and Guidelines
OTC articles
Before You Apply: Four One-Time Close Loan Tips

What do you need to know about One-Time Close mortgages before you apply for one? There are some issues to be aware of that can save you time and frustration--knowing before you start filling out application forms is a big help!

Construction Loans for New Borrowers

Did you know that even as a first time borrower, you may be eligible for a One-Time Close construction loan that allows the borrower to build a home on their own lot rather than buying an existing house?

One-Time Close Construction Loans for Veterans

Veterans have multiple options when it comes to deciding which type of One-Time Close construction loan to choose from. Naturally, any veteran who has the entitlement to use a VA mortgage for this loan would choose to do so based on the zero down home loan option all by itself.

-- Find More Articles in the OTC Library -- is not a government agency. We do not offer or have any affiliation with loan modification, foreclosure prevention, payday loan, or short term loan services. Neither nor its advertisers charge a fee or require anything other than a submission of qualifying information for comparison shopping ads. We do not ask users to surrender or transfer title. We do not ask users to bypass their lender. We encourage users to contact their lawyers, credit counselors, lenders, and housing counselors.

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