One-Time Close Loans | FHA and VA Construction Loans
Learn all about the VA and FHA versions of the One-Time Close Loan.

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

Conventional, VA, or FHA One-Time Close Loan?

Conventional, VA, or FHA One-Time Close Loan?
What are the differences between FHA, VA, and conventional construction loans? There are some important issues to keep in mind about each type of loan before you decide on the right type for you.

FHA One-Time Close Mortgages Versus VA Single-Close Construction Loans

The similarities between these two mortgage programs have much to do with the fact that they are both backed by the federal government and technically have more lenient credit requirements than their conventional counterparts.

FHA construction loans have a down payment requirement (3.5% is typically required for purchase loans but a single-close VA loan on paper has no down payment requirement. That is one of the major appeals of the VA mortgage program in general.

Your FHA construction loan will require mortgage insurance, typically either for 11 years or the full term of the loan depending on the terms of your mortgage.

VA mortgages, on the other hand, require zero down payment and there is no VA mortgage insurance requirement. But there’s something to keep in mind about the VA loan option. VA home loans aren’t offered to the general public. They are only for applicants with qualifying military service.

VA and FHA mortgages will require the use of escrow, and for these government-backed construction loan programs you cannot act as your own contractor in most cases; in spite of VA and FHA loan rules addressing scenarios where a borrower is their own builder, you may find lenders unwilling to allow you to act as your own labor.

FHA Single-Close Mortgages Versus Conventional Construction Loans

Typical conventional loans may require at least 20% down to avoid mortgage insurance, and the borrower must qualify with higher credit score requirements than FHA mortgages. Conventional construction loans will typically require the use of escrow the same as FHA and VA loans, and there is a mortgage insurance requirement.

FHA mortgages in general feature more lenient credit requirements than some conventional loans, and FHA borrowers have the option of cash-out refinancing when there is sufficient equity in the home. 

With a conventional mortgage once you hit a certain point in your home equity you may have the option of applying for a home equity line of credit. FHA loans don’t feature the HELOC option but if you need money to repair or upgrade your home at some point an FHA 203(k) Rehabilitation Refinance loan is an option to consider.

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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Articles, Updates, and Guidelines
OTC articles
How To Credit Qualify For An FHA Construction Loan Or A VA Construction Loan

If you're looking to finance the construction of your new home, you may be wondering if you can qualify for a VA or FHA One-Time Close construction loan. In this article, we'll go over the four things you need to credit qualify for one of these loans. Remember, VA loans are not offered to all applicants but only to those with qualifying military or uniformed service. FHA loans are offered to all who qualify for the loan.

Before You Build, Check Your Credit

If you are building a home in 2023 with a One-Time Close mortgage, you likely understand that these loans have higher credit standards than existing construction mortgages. Sometimes you need every advantage you can get to qualify for a more complex loan like a single close construction mortgage, and paying attention to the credit issues below can help.

Construction Loan Market Outlook Improving In 2023

Finance blogs are reporting interest rates falling more than three-quarters of a point since the end of October 2022, with more improvements possible down the road. Now is a very good time to consider your construction loan options, though with the caveat that we may experience a bumpy road back to lower rates and less of a seller’s market for real estate overall.

-- 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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