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
Construction Loans For Veterans and Military Members
January 11, 2024The Federal Reserve Bank of St. Louis estimates there were just under 18 million veterans in 2023. Add to that number of members of the Guard and Reserve, and you get approximately 19 million 360 thousand people. What do they need to know before taking advantage of their VA home loan benefits or the FHA One-Time Close construction loan program to build a home on their lot or land they buy with the loan?
Why Construction Loans Are Different
January 4, 2024What makes an FHA One-Time Close construction loan (or any other type) different from a home loan to buy an existing home? Aside from the obvious aspects, such as needing to own or buy a plot of land to build on and hiring contractors to do the work to build the property, how do single-close construction loans differ?
Build On Your Own Lot in Virginia with an FHA / VA Construction Loan
January 3, 2024There is an FHA / VA backed One-Time close construction to permanent financing program currently available to eligible veterans with $0 down payment and to others with 3.5% down payment. Current lower home inventory levels may make it a good time to start planning to build a home utilizing this Single Close program.
