One-Time Close Construction Loan Approval

What factors affect One-Time Close loan approval? A construction loan can be harder to qualify for than other types of home loans and you’ll want to give yourself the best shot at loan approval you can right from the start.

Factors That Can Kill A Construction Loan

Here is a short list of things that hurts your chances at construction loan approval:

• Your FICO scores got worse after your loan application was pre-approved.
• You had a major job change switching from salary to contract, salary to self-employed, or other major changes during or after your pre-approval.
• You applied for more credit after applying for the construction loan.
• You skipped or missed payments on financial obligations after the loan was pre-approved.
• You failed to disclose a major debt or financial obligation that is later discovered during a credit pull.
• You failed to accurately disclose income or job information.
• Your income or employment is unverifiable.

Construction Loan Approval: What You Should Know

The basic aspects of construction loan approval include your FICO scores, your debt repayment history, and credit utilization. A participating lender will review all three for a conventional, VA, or FHA mortgage. Some borrowers mistakenly believe these factors are the ONLY ones that go into loan approval. They are not. But they are very important.There has been much written about improving your credit scores ahead of a home loan, and much has also been written about making consistent payments on all financial obligations and lowering the overall amount of your monthly debt. But not as much is written about how long it takes to get results when doing so. 

Time Is a Factor

Construction loans take time--the permitting process alone may take longer than you realize and getting the construction phase of the loan completed could take many months.  The same general timeline you can expect when starting a construction loan process--about 12 months--is the same general amount of time you should take BEFORE that process to work on your credit.

Credit reports do not update automatically. If you start seeing improvements to your FICO scores, you should not stop your strategy in its tracks. Making your credit report shine is an ongoing process and there really is no finish line. Be prepared to work on your credit for as long as it takes to get to loan closing day and beyond. 

Why? Because any major changes to your credit are grounds for the lender to re-verify your ability to afford the loan. If your credit scores go down before loan closing day, it could jeopardize the mortgage. Some borrowers don’t realize you can have multiple credit checks run on you before closing day...and likely WILL experience a second credit pull.

Want More Information About One-Time Close Loans?

We have done extensive research on the FHA (Federal Housing Administration) and the VA (Department of Veterans Affairs) 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 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 and VA  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.

Contact Us:  Send Us Your Request – Spam Safe

Please send your email request to [email protected] which authorizes OneTimeClose.com to share your personal information with one 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 $1,500,000 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.