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

Before You Apply For A Construction Loan

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.

How do you avoid credit score problems ahead of your FHA loan application?

Avoid Big Purchases

Putting a large purchase on your credit card ahead of a mortgage loan application does two things--it changes your credit utilization ratio, and it potentially increases the amount of your outgoing debt compared to your monthly income.

The higher your credit card balances, the tougher it may be for your lender to approve the mortgage. Ideally, your credit utilization rate should be only about 30% of your credit limit. Setting a goal to get below 50% is a great place to begin if you are concerned about your credit use.

Avoid Closing A Credit Card Account

It’s one thing to pay off a credit card, but it’s another issue altogether to close one. Closing a card hurts your overall credit picture because it’s reducing the amount of available-to-you credit. Your credit use is likely more impressive if you show moderation with a larger amount of available credit.

The age of your credit accounts is an important factor in your credit report, and unless you are considering closing an account with a high annual fee that you aren’t using, it’s likely a bad idea to close any credit card account ahead of a construction loan application.

Don’t Miss Payments

We talk about this factor constantly only because it is one of the most common; missed payments in the 12 months leading up to your home loan application may be a big sticking point for your lender.

Don’t skip or miss payments on ANY financial obligation a year or more before you apply for the new home loan. You will be glad you took this advice when loan approval time comes.

Avoid Opening New Credit

Don’t apply for other new credit before you apply for a One-Time Close construction loan or any other major line of credit. Your debt ratio is, as mentioned above, an important part of the data your lender uses in the decision-making process.

Adding new debt to your monthly financial picture may make your loan officer wonder if you can truly afford the loan when the new indebtedness is factored into the picture.

Remember, some kinds of mortgage lending such as construction loans can be more expensive and may require your lender to use more due diligence to ensure you can afford the loan and that you are a good credit risk. It helps to think like a loan officer in the year leading up to your application--what would YOU look for in your own credit report if you had to approve a 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 i[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 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 $1,000,000 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
Using The Right Kind Of Loan To Build Your Home

If you want to build your own home from the ground up, or you want to purchase a fixer-upper, your loan officer will help you to apply for the right loan for your needs. Not all mortgages are alike, and the nature of the purchase often dictates the type of loan you get. For example, building a house on land you own (or purchase as part of the project) would require a single-close construction loan.

Construction Loan Down Payments

One-Time Close construction loans have unique requirements, Lenders who offer these loans often have higher credit score requirements and there are some unique issues for those who choose to build rather than buy existing construction.

Planning Your Construction Loan

If you want to build your home from the ground up on your own lot, the One-Time Close construction loan, also known as a single-close construction loan, is a good option to consider. And when you consider those options, there are some questions to ask that are a bit further down on most people’s “need-to-know” list but should be asked regardless.

-- 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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