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VA and FHA One-Time Close Construction Loans

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How To Get Closer To Loan Approval


How To Get Closer To Loan Approval
If you plan on building a home with a One-Time Close construction loan, there are some important considerations to make when planning and saving for your loan.

What makes you a more attractive borrower to a lender who has to justify approving your single-close construction loan? We examine the possibilities below.

Save Up More For Your Down Payment 

A bigger down payment implies that you have more resources to devote to your mortgage. For some government-backed mortgages, a larger payment can be used as a compensating factor when FICO scores aren’t quite as high as the lender would like.  

Remember that there is less “wiggle room” for lower FICO scores when applying for a construction loan, as these are more costly and complex than an ordinary “purchase loan” used to buy an existing home. 

Longer Job History  

This won’t apply to all borrowers, but if you want to build a home and have not been in the job market for a long time, consider waiting until you have at least 24 months of on-the-job history before applying.

Your lender may have a better time justifying loan approval this way. And if you have made alterations to your career (starting your own business, going freelance, becoming a contractor), consider working in your new capacity for at least 24 months before applying. 

Lower Your Monthly Debts 

Debt ratio is a significant factor in loan approval, but lenders may pay more attention if you need a construction loan. If your monthly bills are eating into your income dangerously close to 50%, you’ll need to lower that ratio before applying for a One-Time Close mortgage. 

How Much Home Loan Can You Afford? 

Many aren’t sure in the early stages of planning and saving for the loan. But you can end some of the uncertainty by using a mortgage calculator to learn what is realistically affordable. 

Have you noticed that there is a common theme in much of the advice listed here?

Taking extra TIME can seriously help you get closer to loan approval, whether taking more time to lower your debt ratio, saving more money, or working on your FICO scores.

Your time today will pay off when you apply for the loan later. 

Want More Information About One-Time Close Loans? 

We have extensively researched 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 who know the product well and consistently provide 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 VA lenders will go up to $1,500,000 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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