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

VA One-Time Close Advantages for Veterans, Military Retirees, Active Duty

VA One-Time Close Advantages for Veterans, Military Retirees, Active Duty
Why should military members and families consider a VA One-Time Close (OTC) construction mortgage? There are many advantages to building instead of buying an existing home and a lot of those advantages are as much about being able to approve the design of your home and making sure it meets your needs and goals before the ground even gets broken on the construction site.

In fact, it’s a very good idea to compare the financial advantages of a VA OTC construction loan AND the non-financial ones to other types of construction loans so you can make a truly informed decision. Here are some of the non-financial advantages--plus one MAJOR financial incentive you should consider.

The Borrower Chooses the Design

Build with plans you select--the design, size, and features of your home are wide open to you in the planning stages of your construction loan. This is true for FHA and USDA construction loans, too; each program has its own rules and requirements.

But military borrowers tend to consider the VA option first because A) it’s a known and trusted resource and B) the Department of Veterans Affairs provides some extra support for VA borrowers that isn’t necessarily available with other types of construction loans. If you get into financial trouble down the road, you can call the Department of Veterans Affairs for assistance if you have difficulty making arrangements with the lender.

The Borrower Does Not Act as Their Own Builder

If you search the VA loan rules in VA Pamphlet 26-7, the VA Lender’s handbook, you’ll learn that technically, VA One-Time Close mortgages typically allow the borrower to act as their own contractor. However, lender standards ALSO apply and most lenders won’t allow you to act as your own builder.

We know what you’re thinking--how is THAT an advantage? For military borrowers who are still subject to TDYs, deployments, or permanent change of station moves, not acting as your own contractor takes the pressure off you to get the work done within the specified time frame you agree upon with the lender. For military retirees, especially recent retirees, there are many other things that will vie for your attention during the construction phase of the loan--borrowers might balk initially about not acting as their own labor force, but when the job is done you might be surprised at how many have changed their minds about that aspect of the project.

It also means that any delays or problems that might be encountered along the way won’t affect the BORROWER in terms of what corrective action needs to be take, but the CONTRACTOR. It’s not always a good idea to do it yourself, especially with such a large amount of money involved with specific deadlines which must be met.

The Biggest Financial Advantage

The VA One-Time Close mortgage is like any other VA mortgage--there is no down payment required in most cases.

You WILL find that lenders may require money down for loans that exceed certain limits recognized by the lender--VA mortgages have no loan limits ever since legislation changed the program but most lenders still recognize county loan limits for other government backed mortgages--you may find a down payment is needed if the loan amount exceeds the lender’s limits--ask before you apply.

In any case, borrowers who don’t have to make a down payment--especially on a construction loan--have a big financial advantage over those who are required to put money down. It’s a very good idea to talk to a loan officer about the zero-down option and learn how this can help you build and buy your new home.

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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