Little or No Money Down Construction Loans for Texas Residents
January 5, 2026
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.
Texas Homebuyers have an excellent alternative when it comes to financing a brand-new home from the ground up. Conventional construction funding sources with banks have been the typical option requiring higher down payments as well as monthly mortgage interest payments during construction. There is a low or no-down payment alternative to consider when it comes to building a new home.
FHA One-Time Close Construction Loans feature the same general requirements as other FHA mortgages, including a low 3.5% down payment, no penalty for early payoff of the mortgage, and the ability to refinance later with an FHA Streamline Refinance loan that can result in a lower rate, a lower payment, or other tangible benefits to the borrower.
VA One-Time Close Construction Loans feature the same general requirements as other VA mortgages, including a true 0% down payment, no penalty for early payoff of the mortgage, and the ability to refinance later with a VA Streamline Refinance loan that can result in a lower rate, a lower payment, or other tangible benefits to the borrower.
No Payments During the Construction Phase
The FHA and VA Construction Loans were designed for ease of use and not to be constraining on the borrowers. The guidelines will not allow the borrower to pay any interest during the construction phase of the loan. This interest is factored into the builder contract and paid for by the builder. That translates into the consumer paying no interest during the construction period with their first contractual payment starting the 1st of the month following a full calendar month after their construction is complete. This is a real advantage because the FHA or VA backed loan is structured so the borrower does not have to worry about making payments on their existing mortgage or lease as well as pay for the interest loan during the construction phase of the loan.
No Requalification of the FHA or VA borrower when the construction is completed
Upon initial approval of the construction loan commitment, the FHA / VA borrower receives underwriting approval on their credit as well as income & employment, bank statements, and other qualifying items. Once the loan is subsequently closed and the construction is fully completed by the builder, both the FHA and VA lender do not require any requalifying items from the borrower. They simply sign additional documents and / or loan modification agreements and no second closing is needed. That is significant because the borrower does not have to pay for any fees which would be charged on a second closing. Also, there will not be another credit pull, and no employment or credit underwriting reverifications are needed because they are not required.
Prudent lenders qualify the borrowers at a slightly higher interest rate at closing in addition to securing an extended lock for the period needed for construction. When the construction is completed, the lender requires a note modification which allows the borrower to get an interest rate at the same or lower rate at which they were originally approved.
Finding the Right Lender
Finding an experienced mortgage lender for this type of FHA and VA construction loan financing is not an easy task. Most FHA and VA lenders concentrate on regular FHA and VA home purchases, cash-out refinances and streamline refinances. Only a select few companies around the nation employ loan officers who fully understand how to put these deals together and provide quality service throughout the process.
If a consumer is serious about purchasing a lot, finding a local builder and has the passion in moving forward with the various steps necessary to get this type of loan, then your next step is to be put in touch with one experienced construction lender licensed in your area who can assist.
What Does it Take to Qualify?
You can finance your stick-built, modular, or double-wide manufactured housing with a One-Time Close loan in any of the 254 counties in Texas. Keep in mind that this construction lending program can only be used for single family homes, but not for duplexes, triplexes, or fourplexes. Investor properties are not allowed, and you cannot function as your own builder / contractor. Non-allowable property types are shown on our home page.
A key advantage of the One-Time Close loan program is that borrowers will only experience one mortgage application, one mortgage approval, and a single closing date. Compare that with more traditional products that feature two of each along with a more complicated process. When construction of your home is complete, there will not be a new borrower requalification or a recertification of the property value. And until that point, mortgage payments will not begin.
If you are looking for a home that fits your family, lifestyle, and future needs, building might be a better plan than buying. Do yourself a favor and consider this option before you make one of the most important decisions in your life.
Now may be a good time to see if you qualify for an FHA or VA One-Time Close Loan.
FHA One-Time Close Construction Loans feature the same general requirements as other FHA mortgages, including a low 3.5% down payment, no penalty for early payoff of the mortgage, and the ability to refinance later with an FHA Streamline Refinance loan that can result in a lower rate, a lower payment, or other tangible benefits to the borrower.
VA One-Time Close Construction Loans feature the same general requirements as other VA mortgages, including a true 0% down payment, no penalty for early payoff of the mortgage, and the ability to refinance later with a VA Streamline Refinance loan that can result in a lower rate, a lower payment, or other tangible benefits to the borrower.
No Payments During the Construction Phase
The FHA and VA Construction Loans were designed for ease of use and not to be constraining on the borrowers. The guidelines will not allow the borrower to pay any interest during the construction phase of the loan. This interest is factored into the builder contract and paid for by the builder. That translates into the consumer paying no interest during the construction period with their first contractual payment starting the 1st of the month following a full calendar month after their construction is complete. This is a real advantage because the FHA or VA backed loan is structured so the borrower does not have to worry about making payments on their existing mortgage or lease as well as pay for the interest loan during the construction phase of the loan.
No Requalification of the FHA or VA borrower when the construction is completed
Upon initial approval of the construction loan commitment, the FHA / VA borrower receives underwriting approval on their credit as well as income & employment, bank statements, and other qualifying items. Once the loan is subsequently closed and the construction is fully completed by the builder, both the FHA and VA lender do not require any requalifying items from the borrower. They simply sign additional documents and / or loan modification agreements and no second closing is needed. That is significant because the borrower does not have to pay for any fees which would be charged on a second closing. Also, there will not be another credit pull, and no employment or credit underwriting reverifications are needed because they are not required.
Prudent lenders qualify the borrowers at a slightly higher interest rate at closing in addition to securing an extended lock for the period needed for construction. When the construction is completed, the lender requires a note modification which allows the borrower to get an interest rate at the same or lower rate at which they were originally approved.
Finding the Right Lender
Finding an experienced mortgage lender for this type of FHA and VA construction loan financing is not an easy task. Most FHA and VA lenders concentrate on regular FHA and VA home purchases, cash-out refinances and streamline refinances. Only a select few companies around the nation employ loan officers who fully understand how to put these deals together and provide quality service throughout the process.
If a consumer is serious about purchasing a lot, finding a local builder and has the passion in moving forward with the various steps necessary to get this type of loan, then your next step is to be put in touch with one experienced construction lender licensed in your area who can assist.
What Does it Take to Qualify?
- Down payments for eligible veterans are not required. $0 down payment loans up to $1,500,000 may be available.
- Down payments for FHA borrowers are as low as 3.5%. 2026 Lending limits for most Texas counties will max out at $541,287, but some go as high as $571,550.
- You will need to verify two years of consistent employment.
- A "middle score" from the three credit bureaus of 620 or better is needed.
- The debt-to-income ratio measures your housing and long-term debt against your income. It should not exceed 41% - 43% and varies from one government agency to another.
You can finance your stick-built, modular, or double-wide manufactured housing with a One-Time Close loan in any of the 254 counties in Texas. Keep in mind that this construction lending program can only be used for single family homes, but not for duplexes, triplexes, or fourplexes. Investor properties are not allowed, and you cannot function as your own builder / contractor. Non-allowable property types are shown on our home page.
A key advantage of the One-Time Close loan program is that borrowers will only experience one mortgage application, one mortgage approval, and a single closing date. Compare that with more traditional products that feature two of each along with a more complicated process. When construction of your home is complete, there will not be a new borrower requalification or a recertification of the property value. And until that point, mortgage payments will not begin.
If you are looking for a home that fits your family, lifestyle, and future needs, building might be a better plan than buying. Do yourself a favor and consider this option before you make one of the most important decisions in your life.
Now may be a good time to see if you qualify for an FHA or VA One-Time Close 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
What to Know About OTC Loan Delays and Their Cost
May 21, 2025A One-Time Close (OTC) residential construction loan is a specialized financing product that combines the financing for a new home's construction phase and the permanent mortgage into a single loan with just one closing. Unlike other methods that require separate loans for building and then for long-term ownership, the OTC loan streamlines the entire process, offering a simplified and often more cost-effective approach to building a custom home than two-close construction loans.
Spotlight on FHA One-Time Close Mortgages
April 29, 2025If you know about regular FHA loans for buying existing homes, the FHA OTC loan for building shares many similarities, but with some key construction-specific twists. FHA One-Time Close mortgages are backed by the Federal Housing Administration. This government insurance protects lenders if a borrower can't pay, allowing lenders to offer loans with easier qualification rules. This makes it a good option for first-time buyers or those who might find conventional loans harder to get.
One-Time Close Basics To Know Before You Commit
April 16, 2025There are two popular ways to finance new home construction using a single loan: the FHA One-Time Close (OTC) loan and a similar Conventional single-close loan. What’s a single-close mortgage? Think of it as an "all-in-one" loan for building a house. Instead of getting one loan for the construction phase and then another separate mortgage loan once the home is finished, a single-close loan combines everything into one package. It covers land, materials, labor, permits, and builder fees.
