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

VA Construction Loans to Build Your Home

VA Construction Loans to Build Your Home
What do you need to know about VA One-Time Close construction loans? Knowing before you start looking for a lender can be a major time saver. The first thing you should know is that the Department of Veterans Affairs VA home loan benefit is for qualifying military members, veterans, and eligible military spouses and features a no money down mortgage.

That zero down mortgage is one of the biggest perks of the VA mortgage program. Did you ever think you could build a house on your own lot without making a big down payment? Some borrowers make one anyway because it can reduce the amount of the VA loan funding fee, but the zero-down option is a great one.

The Difference Between a VA Construction Loan and a Mortgage to Buy an Existing House

Comparatively speaking, buying an existing home is a faster process than building on your own land. But a VA construction mortgage gives you the ability to approve the design for your home, which makes the wait worth it for many borrowers. What do you need to know about this process?

You’ll find that some participating VA lenders will offer construction loans on certain kinds of property but not others. You may be approved to purchase an existing four-unit, mixed use property (but primarily residential) with a VA purchase loan, but you may find it harder to locate a lender willing to approve a no money down VA construction loan for the same kind of structure.

Ask your lender what kinds of property you can build with your VA loan as early in the process as possible. Shopping around for a lender is a very good idea, and this is one reason why.
You may also find that FICO score requirements are higher for construction loans than for existing construction. You should review and work on your credit as early as possible ahead of your new loan application.

Don’t Own Land?

VA One-Time Close construction loans feature the ability to include both the construction and buying land into the mortgage.  You do not have to own land to apply for a construction loan as long as you are buying land in conjunction with it. Remember, VA mortgages do not allow loans simply to purchase undeveloped land with no plans to build.

To apply for a VA construction loan, your lender will need to confirm your ability to qualify for the program--you must have or obtain a VA Certificate of Eligibility. Your lender can help you get this certificate if you don’t have one already, and you can also contact the VA to request one.

VA One-Time Close construction mortgages are for owner-occupiers. You cannot build investment property with these loans. VA borrowers should know that not all participating lenders offer VA construction mortgages, which is why it’s a very good idea to start your planning process earlier than you might if you were buying existing construction.

Remember that construction loans are more involved than buying existing construction--permits, the construction phase itself, and the need for inspections at the end of the process can take time--don’t be in a hurry to move when building a new home, You’ll be glad you took the extra time.

Remember that VA loan rules require proof of builder’s warranties--you will need to use an approved contractor who can supply you with a one-year builder warranty or a 10-year insurance protection policy when the job is done.

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. 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: Kit Homes, Barndominiums, Log Cabin Homes, Shipping Container Homes, Stilt Homes, Solar (only) or Wind Powered (only) Homes.

Contact Us:  Send Us Your Request – Spam Safe

Please send your email request to [email protected] which authorizes to share your personal information with one 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 $1,000,000 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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OTC articles
Comparing Construction Loan Options

What should you be looking for when comparing construction loan lenders? There are important areas to consider including some obvious basics like who offers the lowest interest rate and terms. But there are also some not-so-obvious issues to pay attention to, as we’ll explore below.

Before You Apply For A Construction Loan

What kind of credit mistakes can make it harder for your lender to approve an application for a One-Time Close construction loan? The kinds of credit mistakes we mean here are those that can cause your credit score to drop, which is something you do NOT want happening ahead of an important loan application.

Who Should Apply For A Construction Loan?

Who is right for a construction loan? If you want to build your dream home on your own lot, a One-Time Close construction loan is a smart choice, but not everyone is right for this type of mortgage. Why?

-- 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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