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

With a One-Time Close loan you cannot act as your own builder. Let us help you find the best builder to make your dream home a reality!

- Build a Home on Your Own Lot -
VA Loan - One-Time Close Construction Loan
FHA Loan - One-Time Close Construction Loan

Finding the Right Home Builder

Finding the right builder can be a challenge, especially for first-time buyers who don't know where to start. That's where we can help! Our lenders have created relationships with many contractors who are experienced in the One-Time Close process. They can help get you in touch with knowledgeable contractors who are not only familiar with this particular mortgage process, but can also help guide you to make the best choices, while keeping the vision you have for your new home!

However, if you're a homebuyer planning to find and employ your own contractor, it's important that you know the guidelines every builder must meet for FHA or VA Single Close Loans.

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"As a homebuyer, you need to find and employ a contractor who meets the requirements of the FHA or VA lenders."

Do I Need to Hire a Builder?

Beaver talks about finding your builderFirst things first- you cannot act as your own builder, whether or not you have the experience. Nor can you be responsible for hiring any sub-contractors. The builder you select must be a separate party who acts as the general contractor or construction coordinator, meaning he is responsible for "turnkey" completion of the property and all site improvements. You cannot hire a contractor you are related to, either!

Note: Borrowers should know that while FHA and VA loan rules permit the borrower to act as their own builder, lender standards still apply. Seller, borrower, and/or family members cannot act as contractor or complete any work on the home. Just to be clear, you must use the licensed/approved builder from start-to-finish and cannot deviate from the plans whatsoever.

Connecting the Builder and the Lender

Any builder you select needs to be registered with your lender. While the guidelines may differ depending on the lender, your builder will typically need to send in certain documents to gain authorization, such as:

  • Complete Builder/Retailer Application package provided by your loan officer
  • Builder/Retailer State License
  • Certificate of insurance for inland marine coverage, or builder's risk/course of construction insurance will be required on every loan
  • Certificate of insurance for General Liability and Workers Compensation (or letter explaining why it is not required)
  • For site-built homes: 2 years federal tax returns and year-to-date profit/loss statement, current balance sheet or personal financial statement, and executive summary with overview of experience and history on company and principal
  • For VA approval, builders/retailers will need to be registered with the VA
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Important Differences Between Construction Loan Types

There are many options when you are deciding on a construction loan. Some One-Time Close government-backed mortgages might seem to have identical features compared to their conventional counterparts, but the differences can be important. How much do you know about the features of a conventional One-Time Close mortgage versus the equivalent offered by the FHA?

Construction Loans And Land Appraisals

When it’s time to build your dream home using a One-Time Close construction loan, there is a lot to learn. For example, many first-time home buyers know the house they want to purchase with an FHA mortgage must pass an FHA appraisal. Same for a VA home loan and conventional mortgages. But when a borrower wants to build a home from the ground up and needs to buy a parcel of land to do that, a different kind of appraisal is required.

What You Cannot Do With A Construction Loan

Using a One-Time Close construction loan to build a home from the ground up on your own lot can be a great experience. You have more say over the final disposition of your new home than you would if you purchased existing construction, and everything installed in the home will be brand new. But there are some limits to these loans you should know about before applying for the single-close construction loan.


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