Factors To Anticipate Before You Build Your Home
Some issues may be specific to a program like the FHA One-Time Close program versus the VA alternative or even a conventional equivalent. But other issues apply no matter what type of loan you’re using to build your dream home.
Size Matters
What we mean here is simple. Some borrowers want to build a multi-unit property from the ground up. Does your One-Time Close lender allow a residential build larger than a single unit?
Ask about this early, and be sure to ask every lender you compare. The FHA Single-Family Loan Program might allow you to build a four-unit property on paper. But the lender’s standards may restrict the project to a single-unit home.
Homeowners’ Association Issues
If you build a home in a residential area subject to a Homeowner’s Association agreement, you’ll want to know the specifics of that agreement and use it to inform some of your construction loan choices.
For example, does the HOA specify a certain kind of landscaping? Or do you have carte blanche to landscape as you see fit? That could be a real sticking point, depending on how detailed your HOA covenants and bylaws are.
You may find certain requirements (or none at all) for specific areas, such as landscaping, color schemes, etc.
The Builder Budget
Some aspects of building a home from the ground up aren’t included in your builder’s budget. That landscaping issue mentioned above?
That’s an expense you may have to plan and save for independently of the builder’s work. Some might not be aware of such issues (at first) when planning their home, and if you didn’t add funds for landscaping independently of the construction project, that could be an issue depending on circumstances.
Your builder is responsible for a lot of work in your construction loan project, but areas like landscaping aren’t necessarily part of the equation UNLESS you have it in writing in your contract.
It’s never safe to assume you will get any service or feature not specifically listed in your agreements.
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 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.
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.
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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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