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

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VA Loan - One-Time Close Construction Loan
FHA Loan - One-Time Close Construction Loan
USDA Loan - One-Time Close Construction Loan

The One-Time Close Construction Loan Process

The One-Time Close Construction Loan Process
What do buyers need to know about the One-Time Close mortgage loan process? This type of home loan is perfect for those who want to take their time to build a home to their specifications on their own lot or on land purchased in conjunction for the construction project. Who is right for an FHA One-Time Close construction loan or a VA One-Time Close mortgage?

Financial Qualifications and More

In general, well-qualified borrowers with good credit and the ability to wait until the construction and the inspections are complete before planning to move into the home. What kind of good credit? In general if you are applying for the loan without a co-borrower, a FICO score of 660 or better is recommended.

Those who are applying with another borrower may find a FICO score of 620 is also acceptable.
Military officers, federal employees, those with established careers in the private sector, and any other applicant who does not require down payment assistance should seriously consider their construction loan options if building is preferred to buying.

The One-Time Close Construction Loan Process

The journey toward a completed home built to your specifications (based on a design you agree upon with the builder) is to find an approved builder. You should know that the borrower is not approved to be their own contractor for your construction project, so don’t plan on doing the work yourself regardless of your qualifications as a builder or contractor.

You will need to have a loan amount calculated for the purpose of loan approval--your mortgage amount is not approved until you have filled out all the necessary paperwork for the loan and the loan officer must verify your employment, income, etc.

A credit check will be run. Borrowers should know that more than one credit check happens during the loan process between your application and the closing date, so beware adding new debt or applying for new credit once you have applied for the One Time Close loan until closing day.

Valuation and Down Payment

This type of home loan requires an “as completed” type appraisal. The value of the home is an important part of the home loan approval process and you should know that a down payment may not be required if certain conditions exist based on the valuation of your land. What does this mean?

Basically that you may not be required to make the usual cash payment for an FHA construction loan (VA loans in general do not require a down payment) IF the borrower already owns the land the home will be constructed upon AND there is sufficient equity in that land that meets the down payment requirements for the mortgage. The amount of equity you have in the land will depend on how long you have owned it and the appraiser’s determination of the land’s value.

After loan approval, the construction phase of the mortgage begins, with money disbursed to the contractors in the form of withdrawals from escrow.

The loan will have a closing phase, and once the construction phase of the transaction is finished the loan is converted to a permanent loan with payments due the following month.

Want More Information About One-Time Close Loans?

We have done extensive research on the FHA (Federal Housing Administration), the VA (Department of Veterans Affairs) and the USDA (United States Department of Agriculture) 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 in an effort 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, VA and USDA 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.

Your email to [email protected] authorizes to share your personal information with a 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 $750,000 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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