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

Who Should Apply For A Construction Loan?

Who Should Apply For A Construction Loan?
Who is right for a construction loan? If you want to build your dream home on your own lot, a One-Time Close construction loan is a smart choice, but not everyone is right for this type of mortgage. Why?

Because construction loans are a bit more complex than typical mortgage loan applications. If you are in a hurry to move into a new home, or if you want a home that is more unusual than a typical residence, a One-Time Close loan may not be the right choice.

But if you have time to wait out the construction process and you want a house built that is more comparable to others in the neighborhood, a construction loan may be right for you.

What Type of Closing Is Used For Construction Loans?

Believe it or not, this question is very relevant to our topic here--there are two types of construction loans and the type you choose is crucial. A two-close loan features a separate loan for the construction phase and one for the mortgage. 

You must apply for and be approved for both and there’s always a danger you could be approved for the first loan and denied for the second depending on circumstances.

That means that a two-close construction loan is likely best for borrowers who have Excellent credit; “Excellent” being a proper noun here to describe FICO scores at 800 or better according to Equifax. That can lower the risks associated with a two-close approach.

Who Should Apply For A One-Time Close Construction Loan?

A One-Time Close loan is offered to those with Good credit or better. “Good” is defined by Equifax as FICO scores between 670 to 739. There is no risk of being denied a second loan, and participating lenders typically (at least on paper) approve these loans with FICO scores in the mid-600 range. 

Your experience may vary depending on the lender and your individual credit history. You should consider applying if you have a good repayment history (no late or missed payments for 12 months or more ahead of the loan application) and stable employment.

If you have changed job types in the last year (salary to contract, salary to self-employed, etc.) you may not have enough time in your new employment type to qualify--it’s best to apply after spending at least 24 months in your new type of work, such as being a small business owner after working for someone else. 

Switching jobs in the same career in an upwardly mobile way isn’t the same thing, so be sure to ask the lender about your current circumstances when in doubt.

You should NOT apply for a One-Time Close Construction Loan if you have multiple missed payments in the last 12 months, if you have been discharged from bankruptcy within the year (you’ll be required to wait a MINIMUM of one year before you can apply for a new mortgage) or if you need down payment assistance with your home loan.

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 with 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 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 allow 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 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 is an eligible veteran, 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 $1,000,000 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
Comparing Construction Loan Options

What should you be looking for when comparing construction loan lenders? There are important areas to consider including some obvious basics like who offers the lowest interest rate and terms. But there are also some not-so-obvious issues to pay attention to, as we’ll explore below.

Before You Apply For A Construction Loan

What kind of credit mistakes can make it harder for your lender to approve an application for a One-Time Close construction loan? The kinds of credit mistakes we mean here are those that can cause your credit score to drop, which is something you do NOT want happening ahead of an important loan application.

Who Should Apply For A Construction Loan?

Who is right for a construction loan? If you want to build your dream home on your own lot, a One-Time Close construction loan is a smart choice, but not everyone is right for this type of mortgage. Why?

-- 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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