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

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How To Prepare For A Construction Loan: Basic Issues

How To Prepare For A Construction Loan: Basic Issues

How should you prepare for a construction mortgage? It can take time to prepare your finances and credit for any kind of loan application, and One-Time Close construction loans typically require some extra time to plan and save. 

This is why you should start preparing as early as possible. Among the prime issues related to preparing for a construction loan, lender selection, choosing a contractor, preparing your credit, and saving for your down payment are all crucial areas to consider. 

Finding A One-Time Close Lender

 It’s always important to shop around, but in an era with rising interest rates, comparing lender options is even more important. But it’s not just the rates; what does the lender offer in terms of the other aspects of the construction loan?  

Do you qualify for a VA construction loan? Make sure the lender you want offers the option. Do you want a single-unit property or do you want to build a multi-unit home? Depending on the lender you may or may not have the option to build a house with more than one living unit. 

Choosing A Builder 

The builder issue is critical for the success of your construction loan project. You’ll find that single-close construction loan options typically include your choice of contractors as long as they are licensed and properly insured.

Don’t expect to act as your own builder for a single-close construction loan, if you want to be your own contractor you’ll need to apply for something like an owner-builder loan. 

Saving For Your Down Payment

Construction loans not only require a down payment for non-VA and non-USDA loans, but they may require more than the typical down payment, depending on the nature of the loan and other variables.  How do you know what you’ll be required to put down? You’ll need to ask that question when shopping around for a lender, as no two financial institutions may require the same thing.

Saving up for your down payment and closing costs should be a priority as early as possible in the loan planning process. A home that costs a quarter of a million dollars could require a downpayment of close to $9 thousand, and this money cannot come from down payment assistance programs in typical cases. 

Working On Your Credit  

Lenders tend to scrutinize credit issues more when it comes to construction loans, so you’ll want to review your credit reports for errors and outdated information as early as possible in the planning stages. Look for any evidence of identity theft, errors, or outdated information that should have fallen off your credit report already.

If you need to dispute credit report entries, know that it can take months to clear up and you should not apply for a construction loan with an outstanding dispute that is not yet resolved. 

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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