Important Choices When Building Your Home
If you want to build a home on your own lot with a One-Time Close construction loan, there are some things to consider you might not expect--at first. Once you start reviewing your loan options many of these issues will start making themselves known.
There are some obvious choices you have to make including picking a lender, choosing plans for the home, and deciding what type of loan to use--conventional, FHA, VA, etc.
But what about those other important choices? And by that, we mean selecting the types of fixtures, countertops, carpet, paint, and other things crucial to the aesthetics of the home. Your custom builder may offer you multiple options in a variety of price points. Which to choose?
Naturally, at least some consideration will go toward your budget--if you are inclined to reject “upscale” features in favor of making your loan funds go further, you may still be offered a choice between a “budget” option and a “midrange” option. Which is better?
That is impossible to say across the board, as some budget features might be appropriate in one area. For example, do you really need upscale fixtures and countertops installed in a laundry room? You might be inclined to splurge more in the kitchen or dining room instead.
But chances are good you may be offered a package of options rather than individual choices. In general, a midrange option is smart; the old saying about getting something you can grow into instead of out of may apply here.
The same considerations will apply when it’s time to decide how to furnish the home with a stove, sink, refrigerator, etc.
It’s smart to consider these options in terms of how they will serve you long-term. A cheap stove might save you money on the front end, but if it requires repairs or replacement later down the line was it worth the purchase in the first place?
Buying a more reliable brand may cost a bit more upfront, but the dependability you get is a good trade-off.
The home’s exterior is another consideration. Yes, you could go with a budget option but what you should be asking about isn’t so much price as durability.
How long do you get to wait until you have to replace the siding? With a budget job, you could be looking at sooner rather than later. With a midrange or even an upscale siding option, will your replacement window look any better?
Issues like these should be at the top of your mind when it’s time to decide on plans and options for building your new home with a One-Time Close construction loan.
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.
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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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May 21, 2025A One-Time Close (OTC) residential construction loan is a specialized financing product that combines the financing for a new home's construction phase and the permanent mortgage into a single loan with just one closing. Unlike other methods that require separate loans for building and then for long-term ownership, the OTC loan streamlines the entire process, offering a simplified and often more cost-effective approach to building a custom home than two-close construction loans.
April 29, 2025If you know about regular FHA loans for buying existing homes, the FHA OTC loan for building shares many similarities, but with some key construction-specific twists. FHA One-Time Close mortgages are backed by the Federal Housing Administration. This government insurance protects lenders if a borrower can't pay, allowing lenders to offer loans with easier qualification rules. This makes it a good option for first-time buyers or those who might find conventional loans harder to get.
April 16, 2025There are two popular ways to finance new home construction using a single loan: the FHA One-Time Close (OTC) loan and a similar Conventional single-close loan. What’s a single-close mortgage? Think of it as an "all-in-one" loan for building a house. Instead of getting one loan for the construction phase and then another separate mortgage loan once the home is finished, a single-close loan combines everything into one package. It covers land, materials, labor, permits, and builder fees.
