One-Time Close Loans | FHA and VA Construction Loans
VA and FHA One-Time Close Construction Loans

- Build a Home on Your Own Lot -
VA Loan - One-Time Close Construction Loan
FHA Loan - One-Time Close Construction Loan

One-Time Close Construction Loan Interest Rates

One-Time Close Construction Loan Interest Rates

What should you know about interest rates before committing to a construction loan? If you want to build your home from the ground up, chances are good that you’re prepared for or are getting ready for the extra costs. Chances are also good you would love a way to reduce the overall cost of your One-Time Close construction loan.

Getting a lower interest rate can help, mainly if your plans include keeping the home for many years. Some are tempted to apply for an adjustable-rate mortgage to build a home, thinking they can save money on the introductory rate and refinance into a fixed-rate mortgage when that intro rate expires.

The only problem is finding a participating lender who would be willing to offer you a single-close construction loan with an adjustable rate. Many lenders simply won’t agree to such an arrangement.

Over a 30-year loan, the savings of a lower fixed-rate construction loan add up. One of the best ways to start off saving money on interest rates is to work on your credit scores before applying. If you begin preparing your credit a year or more in advance of your loan application, you could raise your FICO scores and improve your overall chances at a better rate.

Lender standards for construction loans often include higher FICO score qualifications than for existing construction properties. A FICO score of 700 or higher may be considered low-risk for many borrowers. 

If you apply for a construction loan with scores starting in the mid-600s you may still qualify for the loan but you may be offered a higher interest rate. Some borrowers might be willing to accept this thinking that they can offset some of the costs of that higher rate by getting down payment assistance.

But while that assistance may be an option on paper, you may find One-Time Close lenders or single-close construction loan lenders are unwilling to approve a construction loan where down payment assistance is required. That is an important factor to keep in mind--some assume down payment help is on the table for all mortgage loans.

And what about paying upfront to lower your interest rate? This process is called “buying points” or purchasing “discount points” before the loan closes.

If you have a 30-year mortgage for a total of $250,000 and decide to purchase two discount points, you will spend around $5 thousand, lower your monthly mortgage payment by $60, and break even on the discount points about six years down the line. 

But the homeowner who plans to sell later on, even a dozen years later might do well to skip paying the discount points since the real savings come over a much longer period of time.
The basic formula is easy to remember; if you plan to keep your home a long time, getting the lowest possible interest rate is a good idea if your goal is to save more money over the full term of the loan.
If you plan to sell long before then, you might want to skip buying discount points and concentrate on raising your FICO scores the year before you apply for the new loan.

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. 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: 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 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 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.

See Your Credit Scores From All 3 Bureaus

Do you know what's on your credit report?

Learn what your score means.

Articles, Updates, and Guidelines
OTC articles
Construction Loan Terms To Remember Before You Start

There are many industry terms unfamiliar to first-time home buyers, especially those looking for a One-Time Close construction loan. Knowing some of these terms in advance can help you make better decisions in the planning stages of your single-close loan. We examine some important construction loan terms below to help you better navigate the process.

What To Know About Construction Loans Before You Apply

There are a lot of myths about home loans in general and a few pervasive ones about construction loans worth dispelling. What do you need to know when you commit to building your own home from the ground up?

Construction Loan Approval Rules For Employment And Income

If you want to build your own home, it’s good to know that doing so means taking some extra time to work on your credit and employment history before applying. Construction loans are harder to qualify for with income and employment for some, what do you need to know before you start the process? We examine some key points.

-- Find More Articles in the OTC Library -- is not a government agency. We do not offer or have any affiliation with loan modification, foreclosure prevention, payday loan, or short term loan services. Neither nor its advertisers charge a fee or require anything other than a submission of qualifying information for comparison shopping ads. We do not ask users to surrender or transfer title. We do not ask users to bypass their lender. We encourage users to contact their lawyers, credit counselors, lenders, and housing counselors.

SecureRights Advertiser Contact Information

One and Won is a registered trademark of Texcorp Mortgage Bankers, Inc.