Construction Loan Choices
July 12, 2024
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.
When planning a construction loan, you have many options. For example, do you want to buy land with a loan to build the house? Or do you already own a parcel suitable for the construction project?
There are many other choices to make with home loans, but some don’t necessarily apply to construction mortgages. We examine some of them below.
Construction Loan Term
Depending on the construction loan you apply for, you may have loan term choices. For example, the FHA One-Time Close mortgage is offered as a 15-year or 30-year loan.
For these mortgages, the loan term begins after the construction project is complete. Compare that to the VA single-close construction loan option, a 30-year loan, but the loan term may begin during the construction phase.
Ask your construction lender early in the process when the loan repayment term begins for the construction loan you need.
Fixed Rate or Adjustable Rate?
Those buying existing construction may be able to choose between a fixed-rate loan and an adjustable-rate mortgage or ARM. However, construction loan options may be restricted to fixed-rate loans depending on the lender.
Ask a participating lender about your construction loan interest rate options and compare multiple financial institutions for best results.
Single-Unit Or Multi-Unit Home?
Here is another area where buying existing construction has more options. A typical FHA or VA One-Time Close lender may restrict these loans to single-unit properties.
While it is true that you can buy a duplex or fourplex as existing construction, the tradeoff with building a single-unit home with a single-close mortgage is that you have more control over the home's design, layout, and features.
Financing Mortgage Insurance
VA loans, including construction loans, do not require an upfront mortgage insurance premium.
FHA One-Time Close loans typically require an upfront mortgage insurance premium at closing time.
This premium can be paid in cash, which keeps your total loan amount lower, but you can also finance it. If you choose to include the upfront mortgage insurance premium in the loan amount, be advised that you must finance the entire amount or pay the entire amount in cash at closing.
There are many other options to consider. It’s wise to compare your choices among multiple lenders to see which offers you the best construction loan.
There are many other choices to make with home loans, but some don’t necessarily apply to construction mortgages. We examine some of them below.
Construction Loan Term
Depending on the construction loan you apply for, you may have loan term choices. For example, the FHA One-Time Close mortgage is offered as a 15-year or 30-year loan.
For these mortgages, the loan term begins after the construction project is complete. Compare that to the VA single-close construction loan option, a 30-year loan, but the loan term may begin during the construction phase.
Ask your construction lender early in the process when the loan repayment term begins for the construction loan you need.
Fixed Rate or Adjustable Rate?
Those buying existing construction may be able to choose between a fixed-rate loan and an adjustable-rate mortgage or ARM. However, construction loan options may be restricted to fixed-rate loans depending on the lender.
Ask a participating lender about your construction loan interest rate options and compare multiple financial institutions for best results.
Single-Unit Or Multi-Unit Home?
Here is another area where buying existing construction has more options. A typical FHA or VA One-Time Close lender may restrict these loans to single-unit properties.
While it is true that you can buy a duplex or fourplex as existing construction, the tradeoff with building a single-unit home with a single-close mortgage is that you have more control over the home's design, layout, and features.
Financing Mortgage Insurance
VA loans, including construction loans, do not require an upfront mortgage insurance premium.
FHA One-Time Close loans typically require an upfront mortgage insurance premium at closing time.
This premium can be paid in cash, which keeps your total loan amount lower, but you can also finance it. If you choose to include the upfront mortgage insurance premium in the loan amount, be advised that you must finance the entire amount or pay the entire amount in cash at closing.
There are many other options to consider. It’s wise to compare your choices among multiple lenders to see which offers you the best 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.
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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.
