One-Time Close Loans | FHA and VA Construction Loans
Learn all about the VA 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

Before You Apply: Four One-Time Close Loan Tips

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.

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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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!

Construction Loans for New Borrowers

Did you know that even as a first time borrower, you may be eligible for a One-Time Close construction loan that allows the borrower to build a home on their own lot rather than buying an existing house?

One-Time Close Construction Loans for Veterans

Veterans have multiple options when it comes to deciding which type of One-Time Close construction loan to choose from. Naturally, any veteran who has the entitlement to use a VA mortgage for this loan would choose to do so based on the zero down home loan option all by itself.

-- Find More Articles in the OTC Library -- is not a government agency. We do not offer or have any affiliation with loan modification, foreclosure prevention, payday loan, or short term loan services. Neither nor its advertisers charge a fee or require anything other than a submission of qualifying information for comparison shopping ads. We do not ask users to surrender or transfer title. We do not ask users to bypass their lender. We encourage users to contact their lawyers, credit counselors, lenders, and housing counselors.

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