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

Conventional, VA, or FHA One-Time Close Loan?


Conventional, VA, or FHA One-Time Close Loan?
What are the differences between FHA, VA, and conventional construction loans? There are some important issues to keep in mind about each type of loan before you decide on the right type for you.

FHA One-Time Close Mortgages Versus VA Single-Close Construction Loans

The similarities between these two mortgage programs have much to do with the fact that they are both backed by the federal government and technically have more lenient credit requirements than their conventional counterparts.

FHA construction loans have a down payment requirement (3.5% is typically required for purchase loans but a single-close VA loan on paper has no down payment requirement. That is one of the major appeals of the VA mortgage program in general.

Your FHA construction loan will require mortgage insurance, typically either for 11 years or the full term of the loan depending on the terms of your mortgage.

VA mortgages, on the other hand, require zero down payment and there is no VA mortgage insurance requirement. But there’s something to keep in mind about the VA loan option. VA home loans aren’t offered to the general public. They are only for applicants with qualifying military service.

VA and FHA mortgages will require the use of escrow, and for these government-backed construction loan programs you cannot act as your own contractor in most cases; in spite of VA and FHA loan rules addressing scenarios where a borrower is their own builder, you may find lenders unwilling to allow you to act as your own labor.

FHA Single-Close Mortgages Versus Conventional Construction Loans

Typical conventional loans may require at least 20% down to avoid mortgage insurance, and the borrower must qualify with higher credit score requirements than FHA mortgages. Conventional construction loans will typically require the use of escrow the same as FHA and VA loans, and there is a mortgage insurance requirement.

FHA mortgages in general feature more lenient credit requirements than some conventional loans, and FHA borrowers have the option of cash-out refinancing when there is sufficient equity in the home. 

With a conventional mortgage once you hit a certain point in your home equity you may have the option of applying for a home equity line of credit. FHA loans don’t feature the HELOC option but if you need money to repair or upgrade your home at some point an FHA 203(k) Rehabilitation Refinance loan is an option to consider.

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. 

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 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 OneTimeClose.com 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.
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 --

OneTimeClose.com 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 OneTimeClose.com 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.