5 Questions About One-Time Close Loans
May 27, 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.
Why do some home buyers build and why do some buy existing construction? For starters, building a dream home from the ground up on your own lot isn’t for everyone.
An FHA One-Time Close loan is a specialized mortgage designed to finance the construction of a new home. It consolidates all associated costs, including the land purchase, construction expenses, and the permanent mortgage, into a single loan transaction.
This means the borrower completes only one application and one closing, but it also means meeting higher credit qualifying standards and making a potentially larger down payment.
Why would a buyer not choose to purchase an existing home instead?
Purchasing an existing home means a buyer can close on a property and move in within one to two months. An existing home provides certainty, as the buyer can physically inspect the property and its surrounding neighborhood. These homes are also frequently located within established communities offering mature landscapes and public services.
What are the qualification requirements for this loan?
Compared to conventional construction loans, this FHA program generally has more flexible qualification criteria. A key advantage is the low down payment requirement, which can be as minimal as 3.5 percent of the total project cost. Conventional construction financing often requires a down payment of 20 percent or more.
Additionally, the FHA's more lenient credit score guidelines expand access for applicants who might not qualify for a conventional loan.
Describe the loan process
The process begins when the prospective homeowner selects an FHA-approved builder and finalizes the construction plans and budget. Next, the borrower applies for the FHA One-Time Close loan with a mortgage lender. Upon approval and the single closing, the loan proceeds are held in an escrow account.
The lender then disburses these funds to the builder in planned stages as construction milestones are met and verified through inspections. When the home is complete, the loan automatically converts to a standard, permanent mortgage, and the borrower begins making regular principal and interest payments.
For whom is this loan program most suitable?
This loan is well-suited for several types of borrowers. It is an excellent option for first-time homebuyers who have a reliable income but have not accumulated the substantial savings often required for a conventional construction loan down payment.
It is also ideal for individuals who wish to build a home customized to their specific preferences not available in the existing housing market. The program is also beneficial for those intending to develop in areas with limited housing inventory or for individuals possessing a parcel of land.
How does this loan differ from a traditional construction loan?
A traditional construction loan process typically involves two separate financial transactions. First, a borrower secures a short-term loan, often with a variable interest rate, to finance the building phase. Upon the home's completion, the borrower applies for and qualifies for a second loan—a standard mortgage—to pay off the initial construction debt. The FHA One-Time Close loan is structured to avoid this two-step process.
An FHA One-Time Close loan is a specialized mortgage designed to finance the construction of a new home. It consolidates all associated costs, including the land purchase, construction expenses, and the permanent mortgage, into a single loan transaction.
This means the borrower completes only one application and one closing, but it also means meeting higher credit qualifying standards and making a potentially larger down payment.
Why would a buyer not choose to purchase an existing home instead?
Purchasing an existing home means a buyer can close on a property and move in within one to two months. An existing home provides certainty, as the buyer can physically inspect the property and its surrounding neighborhood. These homes are also frequently located within established communities offering mature landscapes and public services.
What are the qualification requirements for this loan?
Compared to conventional construction loans, this FHA program generally has more flexible qualification criteria. A key advantage is the low down payment requirement, which can be as minimal as 3.5 percent of the total project cost. Conventional construction financing often requires a down payment of 20 percent or more.
Additionally, the FHA's more lenient credit score guidelines expand access for applicants who might not qualify for a conventional loan.
Describe the loan process
The process begins when the prospective homeowner selects an FHA-approved builder and finalizes the construction plans and budget. Next, the borrower applies for the FHA One-Time Close loan with a mortgage lender. Upon approval and the single closing, the loan proceeds are held in an escrow account.
The lender then disburses these funds to the builder in planned stages as construction milestones are met and verified through inspections. When the home is complete, the loan automatically converts to a standard, permanent mortgage, and the borrower begins making regular principal and interest payments.
For whom is this loan program most suitable?
This loan is well-suited for several types of borrowers. It is an excellent option for first-time homebuyers who have a reliable income but have not accumulated the substantial savings often required for a conventional construction loan down payment.
It is also ideal for individuals who wish to build a home customized to their specific preferences not available in the existing housing market. The program is also beneficial for those intending to develop in areas with limited housing inventory or for individuals possessing a parcel of land.
How does this loan differ from a traditional construction loan?
A traditional construction loan process typically involves two separate financial transactions. First, a borrower secures a short-term loan, often with a variable interest rate, to finance the building phase. Upon the home's completion, the borrower applies for and qualifies for a second loan—a standard mortgage—to pay off the initial construction debt. The FHA One-Time Close loan is structured to avoid this two-step process.
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.
See Your Credit Scores From All 3 Bureaus
Do you know what's on your credit report?
Learn what your score means.
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.
