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

Five One-Time Close Construction Loan Tips


If you want to build a home on your own lot instead of buying an existing house, the FHA One-Time Close construction mortgage is an option you should seriously consider. FHA construction loans feature the same low down payment requirements (3.5% down for qualified borrowers) as any other FHA mortgage.

You do not have to be a first time home buyer to qualify and your participating FHA lender can advise you on additional options for your home loan such as applying for an Energy Efficient Mortgage (which adds money to the loan for energy saving features in the home). Here’s some advice for anyone considering building a home from the ground up with a One-Time Close mortgage.

Consider Your Timeline

It’s never a good idea to be in a hurry when construction is involved. If you want to apply for a construction loan, build in enough time for yourself to include project delays due to the unexpected.

Take Additional Time to Prepare

In most cases what is meant here is to take time to prepare your credit, but when you want to build a home from the ground up, it’s a good idea to add time in the planning stages to find a design you really want and do the research on costs for the look and location of your home. You may find that trading “the perfect neighborhood” for one a bit further off the beaten track might save you money in land costs that you could put back into the design of your home. These variables depend greatly on the conditions of the local housing market, but it’s definitely worth thinking about.

Consider the Features of the Home You Want

If you build a home instead of buying somebody else’s house, you’ll have to select the features you want in the home. Some aren’t fussy about countertops, trim, how the windows are constructed, etc.

But others want a lot more customization options. If you want granite countertops, for example, you’ll need to price them and compare those prices to more middle-of-the-road type features. The costs associated with some features in the home may make you think twice about certain aesthetics in the new home.

What About Appliances?

Similar to the issues discussed above for countertops and other design features, your selection of appliances will matter, too. If you prefer top-of-the-line selections for your fridge, freezer, washer and dryer, etc. you’ll want to compare the costs of these models to mid-grade appliances and see what your selections do to the overall cost of the project. If the price is less important than having just the right selections, you’ll at least want to anticipate how much more the loan will cost as early as you can.

Landscaping

While not necessarily associated with the loan costs for building your new home, landscaping is an expense you will have to anticipate in any event. When saving up for your down payment and other costs, you’ll want to think ahead and set money aside for issues like this that aren’t covered necessarily by the mortgage itself, but do affect your bank balance at a time when you are making a lot of other payments to get the home your want.

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.

OneTimeClose.com 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 OneTimeClose.com 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
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.

How Much Can You Borrow to Build?

If you want to build your home instead of buying someone else’s house, there is a type of construction loan that can help. The One-Time Close construction loan eliminates the need for a second loan application and approval process compared to some other types of construction loan.


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