One-Time Close Loans | FHA and VA Construction Loans
VA and FHA One-Time Close Construction Loans

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VA Loan - One-Time Close Construction Loan
FHA Loan - One-Time Close Construction Loan

Comparing Construction Loan Options

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.

Preferred Lenders?

Some contractors who build houses for a living may have a preferred lender. If you are researching contractors and you collect the names of a few of these, it’s a smart idea to compare them to one another as well as with lenders not on these preferred lists. 

In some cases, there may be a good reason to use the preferred lender, in others you might do better by shopping around.

Don’t Bother Shopping Around For A Lower Down Payment

When comparing lenders, you may be tempted to see which of them might offer you a lower down payment requirement for the construction loan. 

FHA construction loans have a low 3.5% down payment minimum to begin with and you won’t find a down payment option lower than that for a One-Time Close construction loan unless you qualify for a VA construction loan. VA loans typically have a zero-down option and VA construction loans are definitely a good option to consider--IF you qualify for one. 

Those who do not should know that in addition to the down payment requirement in general, specifically, you may find that participating lenders do not permit down payment assistance on FHA construction loans, VA, or any other equivalent. 

Conventional single-close construction loans typically feature down payment requirements in the 20% range.

Borrowers who worry about their ability to afford a down payment on a construction loan may not be the right candidate for one, and lenders take the ability to make your down payment on this type of mortgage very seriously.

Details, Details, Details

One thing you should take into consideration early in your planning for a single close construction loan is the land you are using to build your home on. Do you own it already? Do you own it free and clear? Ask any prospective lender about your needs to purchase land, or use land you already own. Be sure to ask about your options for using land equity as part of your down payment.

And no matter who you decide to use for your construction loan lender, be sure to ask about how any delayed mortgage payments (due to construction) will affect your loan. If you manage your loan properly you may be able to avoid dealing with the effects of those delayed payments.

Ask your loan officer how that financial institution typically advises borrowers in these cases--you could close on your construction loan and not have to make a payment until later in the year or the following year depending on when construction starts. How will this affect your mortgage payments? Ask each lender for their approach to dealing with this issue.

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 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.
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Articles, Updates, and Guidelines
OTC articles
Expect The Unexpected With Your One-Time Close Loan

If you want to build a home from the ground up on land you own or buy in conjunction with the loan, you need a One-Time Close construction loan. Available as a VA or FHA option, the single-close construction loan makes it possible to build a home with plans and materials you approve.

Construction Loan Terms To Remember Before You Start

There are many industry terms unfamiliar to first-time home buyers, especially those looking for a One-Time Close construction loan. Knowing some of these terms in advance can help you make better decisions in the planning stages of your single-close loan. We examine some important construction loan terms below to help you better navigate the process.

What To Know About Construction Loans Before You Apply

There are a lot of myths about home loans in general and a few pervasive ones about construction loans worth dispelling. What do you need to know when you commit to building your own home from the ground up?

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