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

Which Construction Loan Should I Apply For?

Which Construction Loan Should I Apply For?
There are three different government-backed One-Time Close construction loans offered to those who want to build a home on their own lot. There is a USDA version of the One-Time Close construction loan, a VA Loans version, and an FHA One-Time Close mortgage.

These loans allow you to have a single application and closing date for the entire process. Other types of construction loans may feature one application and closing date for the construction phase and a separate application and closing date for the purchase of the property itself. 
Not so with the One-Time Close loan which makes this process easier for borrower and lender alike by eliminating the need to suffer through TWO approval processes.

Should I Get a USDA One-Time Close Construction Loan?

Here’s the most important thing you should know about USDA One-Time Close loans; they are need-based, and feature household income restrictions common for the USDA home loan program. If you do not meet the USDA’s low-to-moderate income requirements, you won’t qualify for the loan even with perfect credit scores and a big down payment.

Furthermore, USDA literature states these loans are not available everywhere. According to the official site, “USDA finances housing in eligible rural areas with populations up to 35,000.”

Should I Get A VA One-Time Close Construction Loan?

The most important thing to know about VA One-Time Close construction loans is that unless you are either an eligible veteran with qualifying military service or a qualifying surviving spouse of a veteran who has died as a result of military service.

If you don’t fit into one of those two categories, the VA One-Time Close loan is not open to you. The first question people ask at this stage is “what constitutes qualifying military service?” But the answer is, it all depends on what era you joined the military in, so there’s no single answer. 
Talk to a lender if you believe you may be entitled to VA home loan benefits, the participating lender can help you establish your eligibility.

Should I Get an FHA One-Time Close Construction Loan?

FHA One-Time Close loans are the most available of the three loans we’re discussing here. FHA construction loans are for any financially qualified applicant. These loans are NOT restricted to first-time home buyers, nor are they limited to those who have a financial need. FHA construction loans are NOT need-based loans like the USDA version, and they are not tied to military service like the VA version.

FHA One-Time Close construction loans have the same down payment requirements as any other FHA loan and while your lender’s credit requirements for this type of home loan might be a bit higher than usual, the FICO score ranges are still within the 600s for maximum financing.

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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OTC articles
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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