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

- Build a Home on Your Own Lot -
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 Construction Loans

VA One-Time Close Construction Loans
Some home loan applicants, especially those interested in applying for VA One-Time Close (OTC) construction loans to build on their own lot, have frustrations finding a lender who offers these types of mortgages.

Some lenders go so far as to discuss VA OTC loans on their official sites, but without actually offering the mortgages themselves. 

Borrowers who encounter this can potentially experience a high level of frustration after having spent enough time on the lender’s website reading about this VA loan option that lets you build rather than buy someone else’s home only to discover that the participating lender does not actually offer the construction loan option.

What should borrowers do to avoid this? It sounds like a no-brainer, but the best thing to do is to try exploring the lender that DOES offer the VA One-Time Close mortgage.That’s the most obvious advice, but there are a couple of hidden layers you might not realize exist.

For example, what’s the difference between a lender that does not offer the VA One-Time Close mortgage versus the participating VA lender who DOES, but won’t approve loans for certain kinds of properties like tiny homes, solar-powered houses (that rely on solar energy ONLY), barndominiums, log cabin homes, etc.?

The first lender doesn’t offer any VA One-Time Close mortgages. The second one does, but does not approve loans to build any/all property types. As you might guess, the key here is to understand that not all properties are suitable for the lender to approve loans to build, but there are plenty of housing types that DO meet the lender’s criteria and qualify for consideration under the OTC loan option.

How can you avoid wasting time when you’re interested in applying for a VA One-Time Close mortgage? The first thing to remember is that not all lenders are as well-versed in this type of mortgage as you might expect.

Searching for one that does understand what you are after might be harder than you think but once you do find a loan officer to talk to, explain up front that you want to use your VA home loan benefits to build a house on your own land or on land you will purchase in conjunction with the construction loan.

You should also decide whether you want to entertain other One-Time Close construction loan alternatives such as the FHA OTC loan. VA and FHA One-Time Close mortgages are both backed by the government, and the FHA loan option allows a low down payment of 3.5% similar to other non-OTC mortgages the agency guarantees.

To save time, you should also talk to the lender about the nature of the property you want to build--single family owner-occupied properties are eligible for both VA and FHA One-Time Close mortgages. However, if you plan to build an investment property that you aren’t going to use as your primary residence, you may be denied the loan since VA and FHA construction loans in this context are for owner-occupiers only. It may not be that your participating lender doesn’t offer the kind of mortgage loan you need but rather don’t approve loans for the specific purpose of the loan.

Talk to a lender about your construction loan needs and goals and work out the right type of mortgage loan for you. You’ll be glad you did.

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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Lender Choices for Your One-Time Close Construction Loan

One-Time Close construction loans aren’t as well-understood among buyers, especially first-time buyers. Some look for a lender to get started building a house from the ground up, but encounter trouble in finding the right financial institution.

VA Construction Loans

Comparatively speaking, buying an existing home is a faster process than building on your own land. But a VA construction mortgage gives you the ability to approve the design for your home, which makes the wait worth it for many borrowers. What do you need to know about this process?

One-Time Close Construction Loan Requirements

 While it’s true that building a home from scratch can at times be harder than buying an existing home, the effort is worth it. The key to getting started is to understand the requirements of these loans, but some are hesitant because the process is unfamiliar to them.

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