Avoiding Disappointment With Your Construction Loan
March 1, 2025
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.
Building a custom home with a one-time close loan requires planning. To avoid disappointment in the construction loan process, here's some advice you should review before starting your One-Time Close construction loan application.
As we'll discover below, the single close construction loan process requires some essential steps to avoid disappointment with the finished home. Be sure to:
FHA single-close residential construction loans combine construction loans and mortgage financing. For one-time-close loans, there is one application to fill out and one closing date (hence the name).
The single-close loan differs from more complicated construction loans, which require two applications, more fees, and two closing dates.
Managing Project Timelines
Avoid delays by creating realistic schedules. Your planning should include contingencies for weather, materials and delays in getting them, and what you want to do regarding the use of subcontractors.
Depending on where you want to build, there may be expected weather delays; anticipating this is key.
Work with your builder on a timeline that includes "buffer time." Have clear contracts with milestones. Does your contract contain delay clauses and what are your rights/responsibilities under that clause?
Controlling Budgets on Your One-Time Close Mortgage
Get multiple quotes. Set a realistic budget. Borrowers should expect to set aside 10-20% for unexpected costs, supply issues, and other contingencies. All change orders must be fully documented.
Handling Cost Overruns and Delays
Construction means anticipating unexpected costs and delays and budgeting accordingly. When you encounter a problem or issue along the way, ask questions.
Why are the costs exceeding the budget? Was it a change order, material price increase, or unexpected site condition? Inform your lender and builder as soon as you identify a potential overrun.
As we'll discover below, the single close construction loan process requires some essential steps to avoid disappointment with the finished home. Be sure to:
- Plan thoroughly and choose a good builder.
- Have clear contracts you can read and understand.
- Set realistic timelines and allow for delays due to weather or other issues.
- Have a contingency fund.
- Communicate regularly.
- Monitor finances.
- Stay in touch with the lender at all stages of the process.
- Address problems quickly.
FHA single-close residential construction loans combine construction loans and mortgage financing. For one-time-close loans, there is one application to fill out and one closing date (hence the name).
The single-close loan differs from more complicated construction loans, which require two applications, more fees, and two closing dates.
Managing Project Timelines
Avoid delays by creating realistic schedules. Your planning should include contingencies for weather, materials and delays in getting them, and what you want to do regarding the use of subcontractors.
Depending on where you want to build, there may be expected weather delays; anticipating this is key.
Work with your builder on a timeline that includes "buffer time." Have clear contracts with milestones. Does your contract contain delay clauses and what are your rights/responsibilities under that clause?
Controlling Budgets on Your One-Time Close Mortgage
Get multiple quotes. Set a realistic budget. Borrowers should expect to set aside 10-20% for unexpected costs, supply issues, and other contingencies. All change orders must be fully documented.
Handling Cost Overruns and Delays
Construction means anticipating unexpected costs and delays and budgeting accordingly. When you encounter a problem or issue along the way, ask questions.
Why are the costs exceeding the budget? Was it a change order, material price increase, or unexpected site condition? Inform your lender and builder as soon as you identify a potential overrun.
- Understand the terms for FHA construction loan cost overruns and change orders.
- Discuss solutions with your builder. They may include using alternative materials or adjusting the scope of work.
- If you have a contingency fund, use it to cover the overrun. Document all expenses. If the overrun is significant, discuss financing options with your lender.
- Keep records of the cause and the nature of the delay. Discuss how the delay may affect the project overall.
- Work with your builder to revise the project schedule. If the delay is due to material shortages, explore alternative suppliers. If it’s due to weather, discuss strategies for protecting the site and materials.
- Any adjusted timelines or cost agreements should be in writing.
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.
