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

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Five Things To Know About One-Time Close Construction Loans

Five Things To Know About One-Time Close Construction Loans
Are you examining your options to build a home from the ground up? There are some good things to know before you get started planning your loan. For example, depending on the transaction you may have options to build on land you already own, or on land you purchase in conjunction with the construction loan.

Things To Know About Single-Close Construction Loans #5: Land Equity

If you already own the land you plan to build your home on, it may be possible to use the equity built up in the land as part of your down payment. Much will depend on the type of construction loan you use (VA, FHA, conventional) and the lender issuing the loan. Be sure to ask about this option when comparing lenders--and you WILL want to compare lenders for a construction loan.

Things To Know About Single-Close Construction Mortgages #4: Property Types Count

Your lender may not approve financing for certain property types. Typically these properties have few (if any) comparables in the area, they are often unique or unusual enough to make them a liability for a lender--a barndominium or a tiny house isn’t typically allowed with this type of construction mortgage. You will have the best results looking for a one-time close lender if you want to build a single-family, one-unit home described in the industry as a “stick-built” house.

Things To Know About Single-Close Construction Mortgages #3: No Self-Build

We write about this a lot, but it’s a question that gets asked a lot. Typically you will find lenders unwilling to approve a single-close construction loan for people who want to build the house themselves. This “self-build prohibition” is common enough in the industry that it’s safe to assume you won’t be permitted to act as your own contractor on an OTC construction mortgage.

Things To Know About Single-Close Construction Mortgages #2: Owning Land With A Lien

Some lenders may be willing to pay off a lien on the land you own and add that to the loan amount. You may also have the option to put a land contract into the construction loan prior to making your down payment. You will need to discuss such options with each lender you compare to learn what’s possible in your circumstances.

Things To Know About Single-Close Construction Mortgages #1: Check Your Permit Times

What we mean by this is to know in advance how long it may take you to get the required permits for your construction project. Some housing markets experience significant delays in approving or issuing permits and this can be a factor that affects the timing of the construction and completion of the project. If you have no idea how long it takes to get permits in your housing market, be sure to learn before you commit to the 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 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. 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 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 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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