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

Before You Apply: Four One-Time Close Loan Tips


What do you need to know about One-Time Close mortgages before you apply for one? There are some issues to be aware of that can save you time and frustration--knowing before you start filling out application forms is a big help!

One-Time Close Loan Tips: Buying Land

Don’t expect to be able to use a government-backed One-Time Close construction loan to purchase land without specific plans to build in conjunction with that purchase. OTC loan rules for FHA, VA, etc. don’t allow the purchase of unimproved land with no plans to build.
You don’t have to purchase land in order to use a One Time Close construction mortgage--you can build on your own lot if you own the land prior to the loan.

One-Time Close Loans: Eligible Property Types

You can apply for a One-Time Close construction loan to build a typical house (known as a stick-built home), a modular home, or a manufactured home. Non-traditional properties such as tiny houses, kit homes, and log cabin homes are not eligible under this program.

OTC Loan Tips: Building On The Land

One-Time Close loans require a contractor and your selection must meet acceptability criteria that may be affected by lender standards, state law, and other issues. Borrowers should know they are not permitted to act as their own contractors to build the home. 
Furthermore, One Time Close mortgage loan rules anticipate some types of “end-runs” some might be tempted to try--you can’t use your relatives to act as your contractor, and you cannot stop using the contractor at any point during the project and switch to a different one. 
The plans you make before the construction phase of the loan must happen exactly as described on paper.

One-Time Close Tips: Credit Issues

Generally speaking, you will be required to have a minimum “middle credit score” of 620 or better. If you do not have a credit score of 620 or better, it is recommended to work on your FICO scores and return to the application process when you have improved your scores to 620 or higher.
 
Remember, it takes time for the work you do on your own credit to show up in your credit reports--it may take longer than you realize to see your credit scores improve, but it’s crucial to work on them regardless.

Additionally, no down payment assistance programs are allowed for One-Time Close construction loans.

When you apply for a One-Time Close mortgage, don’t expect loan approval if you have a bankruptcy that is two years old or less, or if you have a 30-day late payment in the last 12 months. Additional lender standards may apply, so it’s a very good idea to work on your credit as early as possible ahead of applying for a construction loan to build on your own land.

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Articles, Updates, and Guidelines
OTC articles
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.

Before You Apply: Four One-Time Close Loan Tips

What do you need to know about One-Time Close mortgages before you apply for one? There are some issues to be aware of that can save you time and frustration--knowing before you start filling out application forms is a big help!

VA One-Time Close Construction Loan Availability

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.


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