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

One-Time Close Construction Loan Requirements

One-Time Close Construction Loan Requirements
Many borrowers would consider building their home on their own lot or on land they buy in conjunction with the home loan. But some are hesitant because the process is unfamiliar to them and may seem a bit daunting. 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.

One-Time Close Construction Loan Requirements: Credit Scores

Expect to be held to a higher credit standard for a construction loan whether you are applying for an FHA One-Time Close mortgage, a VA construction loan, or the USDA version.

Expect your credit score requirements for a construction loan to be in the 600s--the VA, FHA, and USDA FICO score minimums are lower, but lender standards also apply and such standards usually fall in the 600 range. Single applicants applying for an FHA One Time Close loan can expect FICO score requirements at or near 660 in many cases.

Construction Loan Requirements: Interest Rates and Escrow

One-Time close loans to build instead of buy typically feature fixed-rate mortgages. Your interest rate will not go up or down in the construction phase, nor will it change when construction is over and you have moved into your new home. The rate you negotiate with the lender is the rate you will pay for the lifetime of the loan unless you refinance your mortgage.

You should expect to create an escrow account for your mortgage once it is approved as the construction loan process will require cash draws from the account to pay contractors, pay for materials, etc.

Down Payment Rules

FHA, VA and USDA construction loan programs offer loans to qualifying borrowers with no down payment if the applicant owns the property the home is being built upon and there is enough equity in the land to meet the minimum borrower investment requirement for loan approval.

In cases where the land is being purchased in conjunction with the mortgage and the land is financed as part of the loan, a down payment may be required depending on the program you choose.

Down Payment Assistance

Borrowers who are considering a construction loan but need down payment help should know that for One-Time Close construction loans, down payment assistance is generally not permitted.

Approved One-Time Close Housing Types

One-Time Close construction loans are for “typical” construction projects. Barndominiums and tiny homes, which are housing fads some applicants might be interested in pursuing, require specialized construction that falls outside the scope of the FHA, USDA, and VA One-Time Close programs.

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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One-Time Close Mortgages: Fact and Fiction

There are several different types of One-Time Close loans, also known as single-close construction loans. You can apply for an FHA One-Time Close construction loan, there is a VA equivalent, and even a USDA construction loan. Construction loans are available for any financially qualified borrower.

FHA/HUD Update New Construction Inspection Rules

In 2020, the FHA and HUD announced pending changes to the FHA Single-Family Home Loan Lender’s Handbook, HUD 4000.1. This was due to policy alterations in 2018 and 2019 which required the FHA and HUD to overhaul portions of HUD 4000.1 to accommodate the modified rules.

Home Loan Options In 2021: Construction Loans and More

If you are giving serious thought to becoming a homeowner in 2021 you have picked a very good time to explore your options. FHA loan limits are higher in 2021 than they were in most areas during 2020, and there are options including the FHA One-Time Close construction mortgage.

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