Before You Build
October 25, 2023
What do you need to know when comparing contractors on your journey to build a dream home from the ground up? If you want a One-Time Close construction loan, you'll need to take a few steps in the planning stages to make sure your project is as hassle-free as possible.
Do Not Pay Any Contractor In Cash
No matter what you are told by a service provider, contractor, or other third party, you should always get a paper trail for all payments. Do not pay in cash for any reason.
Gather Bids and Review Reputations
Try gathering at least three bids using a minimum of three different contractors. You want to see how much the going rate in your housing market is and who might be charging a markup in certain areas compared to others. You'll also need to review the online and local reputations of these service providers.
Try to search your state government's official site to see whether a contractor has had a recent dispute. You can also search review sites such as Angie's List or even Yelp to get started.
Get It On Paper
You want a minimum of three references for each contractor or builder. No references? You're taking a risk. It's not difficult to look into the reputation of a contractor. It's just time-consuming. But it's well worth the effort.
Check Credentials
Don't assume every contractor has the required paperwork, insurance, licenses, etc.
Before you commit to a contractor, ensure they are licensed in your state and are in compliance with state law regarding insurance.
NO VERBAL AGREEMENTS! Get Everything In Writing
A verbal promise from a contractor is much harder to get legal recourse on than cases where a bid was placed in writing and didn't live up to the promises.
Never gamble with a home loan, especially a construction loan. Be sure to obtain the contractor's promises in writing. Do not work with a contractor who won’t provide details in writing.
Real Estate Attorney
If you question hiring an attorney because of the costs involved, remember you are already spending a great deal of money to build a house. A real estate attorney may be very helpful when building a home you plan to live in for a long time, especially if you aren't sure of your legal rights and responsibilities when the home is being built.
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 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.
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.
Do Not Pay Any Contractor In Cash
No matter what you are told by a service provider, contractor, or other third party, you should always get a paper trail for all payments. Do not pay in cash for any reason.
Gather Bids and Review Reputations
Try gathering at least three bids using a minimum of three different contractors. You want to see how much the going rate in your housing market is and who might be charging a markup in certain areas compared to others. You'll also need to review the online and local reputations of these service providers.
Try to search your state government's official site to see whether a contractor has had a recent dispute. You can also search review sites such as Angie's List or even Yelp to get started.
Get It On Paper
You want a minimum of three references for each contractor or builder. No references? You're taking a risk. It's not difficult to look into the reputation of a contractor. It's just time-consuming. But it's well worth the effort.
Check Credentials
Don't assume every contractor has the required paperwork, insurance, licenses, etc.
Before you commit to a contractor, ensure they are licensed in your state and are in compliance with state law regarding insurance.
NO VERBAL AGREEMENTS! Get Everything In Writing
A verbal promise from a contractor is much harder to get legal recourse on than cases where a bid was placed in writing and didn't live up to the promises.
Never gamble with a home loan, especially a construction loan. Be sure to obtain the contractor's promises in writing. Do not work with a contractor who won’t provide details in writing.
Real Estate Attorney
If you question hiring an attorney because of the costs involved, remember you are already spending a great deal of money to build a house. A real estate attorney may be very helpful when building a home you plan to live in for a long time, especially if you aren't sure of your legal rights and responsibilities when the home is being built.
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 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.
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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Articles, Updates, and Guidelines
FHA Single Close Construction Loans
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.
The VA Construction Loan Timeline
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.
Construction Loan Choices
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.
