Building A House And Hiring Contractors
March 28, 2024
FHA, VA, and USDA: One-Time Close Loans
Want More Information About One-Time Close Loans?
We have done extensive research on 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 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 allows 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, including but not limited to: Kit Homes, Barndominiums, Log Cabin Homes, Shipping Container Homes, Stilt Homes, Solar (only) or Wind Powered (only) Homes, Dome Homes, Bermed Earth Sheltered Homes, Tiny Homes, Accessory Dwelling Units, or A-Framed Homes.
All known FHA/VA One-Time Close Lenders known to our company will not allow a borrower to act as their own contractor, whatsoever. There cannot be self-builds, relative builds, or employer builds.
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. No SSN required • No credit check • 100% free to get started
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 are eligible veterans, 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 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.
Interested in building a dream home with a One-Time Close construction loan? There are important issues to know about these projects, starting with the fact that you typically are not allowed to act as your own builder and must hire contractors to do the work.
Some borrowers must get used to thinking about this, but fortunately, some general guidelines can help them through the process.
The first thing to know is that you must use state-licensed contractors. Don’t bother wasting time considering a builder who is not recognized by your state, asks for compensation in cash, or offers you a “special deal” on “surplus” materials left over from another job.
Vetting A Construction Loan Contractor
Make sure the company is current on liability insurance. Be sure to request the contractor’s license number, then vet them using the appropriate state or local government agency and local reviews of their work
When in the bidding phase, do not get just one or two bids from your proposed contractors. In stead, try for a minimum of three bids and three references each.
Why You Should Never Pay For Any Services In Cash
Paying " alternatively” for supplies or services leaves you vulnerable. The contractor is free to do whatever quality of work they want once you enter an “off the books” arrangement and you won’t have any recourse if the work turns out to be substandard.
Also, beware of situations where you are asked to pay ahead of completed work. Why? Payments rendered before work is approved can become problematic later.
Your construction loan is designed to have payments from escrow to the supplier or contractor. Don’t deviate from that arrangement, especially if a contractor asks you to pay in cash for certain work.
Your Contract Counts
Include ALL project expectations from the written agreement. Any so-called gentlemen’s agreement exposes you later without recourse if your contractor gives you poor workmanship.
Borrowers should also not be led to believe they can keep any unused loan funds from the project. Although home loan construction expenses may come in under budget in some cases, those savings cannot be passed on to the borrower in cash.
Some borrowers must get used to thinking about this, but fortunately, some general guidelines can help them through the process.
The first thing to know is that you must use state-licensed contractors. Don’t bother wasting time considering a builder who is not recognized by your state, asks for compensation in cash, or offers you a “special deal” on “surplus” materials left over from another job.
Vetting A Construction Loan Contractor
Make sure the company is current on liability insurance. Be sure to request the contractor’s license number, then vet them using the appropriate state or local government agency and local reviews of their work
When in the bidding phase, do not get just one or two bids from your proposed contractors. In stead, try for a minimum of three bids and three references each.
Why You Should Never Pay For Any Services In Cash
Paying " alternatively” for supplies or services leaves you vulnerable. The contractor is free to do whatever quality of work they want once you enter an “off the books” arrangement and you won’t have any recourse if the work turns out to be substandard.
Also, beware of situations where you are asked to pay ahead of completed work. Why? Payments rendered before work is approved can become problematic later.
Your construction loan is designed to have payments from escrow to the supplier or contractor. Don’t deviate from that arrangement, especially if a contractor asks you to pay in cash for certain work.
Your Contract Counts
Include ALL project expectations from the written agreement. Any so-called gentlemen’s agreement exposes you later without recourse if your contractor gives you poor workmanship.
Borrowers should also not be led to believe they can keep any unused loan funds from the project. Although home loan construction expenses may come in under budget in some cases, those savings cannot be passed on to the borrower in cash.
FHA, VA, and USDA: One-Time Close LoansWant More Information About One-Time Close Loans?We have done extensive research on 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 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 allows 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, including but not limited to: Kit Homes, Barndominiums, Log Cabin Homes, Shipping Container Homes, Stilt Homes, Solar (only) or Wind Powered (only) Homes, Dome Homes, Bermed Earth Sheltered Homes, Tiny Homes, Accessory Dwelling Units, or A-Framed Homes.
All known FHA/VA One-Time Close Lenders known to our company will not allow a borrower to act as their own contractor, whatsoever. There cannot be self-builds, relative builds, or employer builds.
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. No SSN required • No credit check • 100% free to get started
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 are eligible veterans, 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 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
How To Credit Qualify For An FHA Construction Loan Or A VA Construction Loan
February 7, 2023If you are looking to finance the construction of your new home, you may be wondering if you can qualify for a VA or FHA One-Time Close construction loan. In this article, we will go over the four things you need to credit qualify for one of these loans. Remember, VA loans are not offered to all applicants but only to those with qualifying military or uniformed service. FHA loans are offered to all who qualify for the loan.
Before You Build, Check Your Credit
February 2, 2023If you are building a home in 2023 with a One-Time Close mortgage, you likely understand that these loans have higher credit standards than existing construction mortgages. Sometimes you need every advantage you can get to qualify for a more complex loan like a single close construction mortgage, and paying attention to the credit issues below can help.
Construction Loan Market Outlook Improving In 2023
January 26, 2023Finance blogs are reporting interest rates falling more than three-quarters of a point since the end of October 2022, with more improvements possible down the road. Now is a very good time to consider your construction loan options, though with the caveat that we may experience a bumpy road back to lower rates and less of a seller's market for real estate overall.
