Learn About FHA and VA Construction Loans
Find out how you can build a home on land you already own.
If you've decided to have your new home built from scratch, you might be wondering how to finance the construction and purchase. This Single Close Loan gets you from construction to occupancy with one mortgage in a streamlined process.
PDF Download: One-Time Close 101
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The One-Time Close Loan is a mortgage program that finances the construction, lot purchase, and permanent loan of a new home, all wrapped up in a single mortgage with a single closing.
Previously, most construction loans required two separate closings, as well as a re-qualification process. The One-Time Close Loan helps you avoid the extra step, saving you time and money. And with Single Close Loans available through the VA and FHA, having your new home built on your own land is easier than before!
July 26, 2024The Federal Housing Administration (FHA) offers qualifying borrowers the option to build a home from the ground up using a Single Close FHA Construction Loan. This program, also known as a One-Time Close construction mortgage, allows borrowers to finance the construction of a new home and convert it into a permanent mortgage with just one closing, streamlining the often complex process of building a house.
July 19, 2024VA One-Time Close construction loans help qualifying veterans build homes they will own and occupy once the construction phase is complete. One-time close loans, or construction-to-permanent loans, combine construction and permanent financing into a single closing procedure. VA One-Time Close mortgages have no VA-required down payment or mortgage insurance, making them attractive options for qualifying borrowers.
July 12, 2024When planning a construction loan, you have many options. For example, do you want to buy land with a loan to build the house? Or do you already own a parcel suitable for the construction project? There are many other choices to make with home loans, but some don’t necessarily apply to construction mortgages.
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Non-Allowable Properties
The following home property types are excluded from the program, meaning that you won't be able to use the One-Time Close loan for financing:
Kit Homes
Steel framing kits for metal buildings that are assembled on site.
Barndominiums
Metal structures that combine living quarters with traditional barn space.
Log Cabin Homes
Pre-cut kits for log buildings that are assembled on site.
Shipping Container Homes
A dwelling made from a steel container otherwise used for shipping
Stilt Homes
Houses raised on piles over land or a body of water.
Solar Only or Wind Only Powered Homes
Homes that are powered on-site solely by solar panels or solely by wind turbines.
Dome Homes
Homes made in the shape of a sphere utilizing shell framework.
Bermed Earth Sheltered Homes
Homes with earth (soil) against the walls, roof or buried underground.
Tiny Homes
Homes that are 600 square feet or less.
Accessory Dwelling Units
Additional living quarters that are independent of the primary dwelling.
A-Framed Houses
Building with a tall triangular roof that resembles the letter A.
The primary reason for these exclusions is that all non-regular homes are considered unique properties and hard to get comps for under VA and FHA. These homes require specialized construction techniques, making it even more important that a single builder starts and finishes a project. If the builder were to quit before a job is finished, the lender would need to step in and find a replacement. This can be more difficult than usual due to the specific nature of the work.
