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

Things To Know Before You Commit To A Lender


Things To Know Before You Commit To A Lender
If you are planning to build a house with a single-close construction loan, there are a few questions you should ask before you commit to working with a construction lender. You want to know a few things about that financial institution before moving forward.

Building a home can be a much bigger commitment than purchasing an existing home, and you’ll want a few answers to important questions before you decide. The key to getting the right answers to the questions below? Asking these questions of multiple lenders and comparing the answers.

How Hard Is It To Qualify For My One-Time Close Construction Loan?

Construction loans are riskier for the lender, and therefore they can be harder to qualify for. Ask the lenders you compare to lay out their FICO score requirements, what interest rate you might be offered (expect an estimate, not an exact number), the down payment requirements, and whether closing cost or down payment assistance is allowed. 

Typically, the answer is no on the down payment assistance question but no two lenders are exactly alike.

Ask if the type of loan you want comes with higher credit score requirements compared to other options. For example, if you are applying for a conventional loan, ask about the FHA or VA equivalent and compare the numbers.

Does The Lender Have A Preferred Builder?

Your lender may have a relationship with a contractor, and may or may not have a preferred builder.
You’ll want to know if you are required to use the preferred builder (you shouldn’t be) and whether using the preferred builder offers any special considerations (discounts, perks) compared to bringing in an alternate.

Compare Loan Choices

A One-Time Close construction loan is right for you if you don’t want to do your own building, It’s not a great choice if you want to do your own labor--the type of loan you seek in that case is an owner-builder loan. 

You want a One-Time Close loan if you want to build a house on your own lot or a piece of land you buy in conjunction with the project. But if you plan to rent land instead, the way some do when buying manufactured housing, you will need to ask the lender whether that’s possible or if there is another option you should be considering.

Furthermore, if you want to build a single-unit home for yourself, a single-close construction loan approval is what you seek. But if you want to build an investment property, you may find that One-Time Close mortgages aren’t the option you should be exploring. There are other construction loans created for those purposes.

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. 

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 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 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 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.
See Your Credit Scores From All 3 Bureaus

Do you know what's on your credit report?

Learn what your score means.

Your Scores Now
Articles, Updates, and Guidelines
OTC articles
One-Time Close Loans And Insurance Considerations

When building a home, there are important considerations to make for mortgage insurance and the types of policies you may also need if you are building in an area known for natural disasters. Mortgage insurance and hazard insurance are not the same things and even for homeowner’s insurance policies, there may be a difference in coverage for certain types of incidents like floods or fires.

Understanding Your One-Time Close Mortgage Payment

Building a home on your own lot requires you to do a variety of things before you can accept the keys and move into your brand-new, never-before-owned home. Choosing the lender, selecting the builder, choosing your floor plan, how much you will put down and other decisions are all big parts of the process.

Can I Build A Home With An Adjustable-Rate Mortgage?

If you are interested in building your own home on your own land (or land you purchase in conjunction with the construction loan), you are likely examining your options with an eye on rising interest rates.


-- Find More Articles in the OTC Library --

OneTimeClose.com 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 OneTimeClose.com 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.

SecureRights Advertiser Contact Information

One and Won is a registered trademark of Texcorp Mortgage Bankers, Inc.