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

One-Time Close Facts for First-Time Buyers

One-Time Close Facts for First-Time Buyers
Sometimes half the battle in deciding what type of home loan to apply for is knowing what you really want out of your home. As in, do you need a home designed and built from the ground up on your own lot instead of purchasing someone else’s house?

If that describes you, even as a first-time home buyer, you should seriously consider your options with a One-Time Close construction mortgage.

Buying a home for the first time can be challenging for some; they don’t know the full range of options open to them and as a result they make choices that are less than fully informed. But if you know your options (existing construction loans, build-on-your-own-land loans, etc.) you can make better choices based on your needs and financial goals.

Fact: One-Time Close Construction Loans Are Open to First-Time Home Buyers

FHA One-Time Close loans (FHA OTC) carry the exact same FHA minimum requirements as any other type of home loan for purchase. Your participating lender will explain that the same basic down payment requirements (3.5% minimum for those with qualifying FICO scores) apply, the same rules for mortgage insurance, appraisals, and interest rates also apply.

First time buyers do not have to come up with a bigger down payment just because they have never purchased a home before.

Fact: Lender Requirements Will Vary

Why is it a good idea to shop around for a construction loan? Because not all lenders will offer you the same interest rates and terms. Some lenders may require a higher FICO score for construction loans than for purchase loans to buy existing houses.

Some lenders may not permit you to apply for a construction loan with FICO scores that would qualify for an existing construction home, while others may have similar credit requirements to their other mortgage products. It all depends on the lender.

Fact: It’s Best to Plan Early

Some states have crowded housing markets and permits for construction and other requirements may take much longer in a state like California than in a place like Wisconsin. Demand and the housing market’s ability to respond to that demand will be important factors for some borrowers--start investigating these issues early for best results.

Fact: Construction Loans Will Cost More

Some first-time home buyers aren’t as worried about up-front costs, others need to save money up front and keep their monthly payments within a certain range. Construction loans require more investment than buying an existing construction property because you’ll need a floor plan, laborers to complete the home, inspections must be paid for, permits, etc. Buying an existing construction property may be a better move for those who can’t afford more of the up front costs associated with building instead of buying.

If you aren’t sure you can afford the kind of home you want to build, ask a lender to compare the cost of building versus the cost of buying a comparable home that is already constructed in that housing market.
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OTC articles
One-Time Close Construction Loan Requirements

 While it’s true that building a home from scratch can at times be harder than buying an existing home, the effort is worth it. The key to getting started is to understand the requirements of these loans, but some are hesitant because the process is unfamiliar to them.

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!

VA One-Time Close Construction Loan Availability

How can you avoid wasting time when you’re interested in applying for a VA One-Time Close mortgage? The first thing to remember is that not all lenders are as well-versed in this type of mortgage as you might expect.

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