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

Lender Choices for Your One-Time Close Construction Loan

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. Here’s a couple of variations on a common question we are asked in this regard:

"I want to build a home with a construction loan. My current lender says they won't do a construction loan."

Or alternately,  "I want to use a VA mortgage to build a home but the lender says they don't offer VA construction loans. Can they legally do that?"

Building a home from the ground up instead of buying an existing property is possible with the One-Time Close construction mortgage. There are a variety of options including both VA loans and FHA construction loans, even a need-based USDA construction loan for those who meet the financial requirements. FHA and VA loans are NOT need-based and are offered to any qualified borrower without income caps or other restrictions.

People gravitate toward these mortgages because of more forgiving FICO score rules and lower down payment requirements. But not all participating lenders offer FHA mortgages or VA home loans. 

And some participating FHA or VA lenders won’t permit construction loans for certain types of specialty properties that don’t have comparables in the housing market to compare to in order to properly establish their value. 

You may find a participating lender unwilling to offer construction loans for any of the following types of housing:
  • Barndominiums
  • Kit homes
  • Log cabin homes
  • Shipping container homes
  • Stilt houses
  • Solar-only or wind-powered-only houses
A participating VA or FHA lender may decide to offer some of available home loan products within these programs but does not have to offer all of them. And that is why it pays to shop around for a participating lender who can help you with the specific type of mortgage you seek; what’s more, FHA and VA loan programs encourage this as terms and conditions may vary from lender to lender.

You have the option to discuss pre-qualification and pre-approval for a construction loan; if you aren’t sure what the difference is between the two, ask the loan officer and be sure to inquire about that lender’s FICO score rules and how much of a down payment you should reasonably expect to make under your chosen One-Time Close construction loan program (VA, FHA, USDA).

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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Articles, Updates, and Guidelines
OTC articles
Build a House on Your Own Land

FHA home loan rules in HUD 4000.1 include a section titled “Building on Own Land”.  Are you interested in having a house built for you on your own lot instead of having to choose from existing construction housing?

One-Time Close Construction Loans: VA, FHA, USDA

There are multiple options for those who want a construction loan to build on their own land. Those who do not own land may purchase property in conjunction with the mortgage, and they can choose between several options to finance the purchase and construction.

Mortgage Rules Unique to Construction Loans

If you want to build a home on your own lot using a construction-to-permanent loan, also known as a One-Time Close mortgage or single-close construction loan, you should know that some home loan rules are different for construction loans than for existing construction mortgages.

-- 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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