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!
September 6, 2023There 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?
August 30, 2023When 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.
August 23, 2023Using 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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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.
