Quantcast

FHA construction loans may be used to finance construction of a one- to four-unit residence through a Construction to Permanent Mortgage through the FHA One-Time Loan Program. It's one of the best products on the market that very few people fully understand.

FHA Mortgage Loan Rates

September 16, 2019
FHA Rates for September 16, 2019
Compare 30 Year Fixed Mortgages
Compare 15 Year Fixed Mortgages
Use our mortgage calculators
to see what you can afford!
Get started one
Get started two
Get started three
Get started four
FHA.com is a privately owned website, is not a government agency, and does not make loans.

Choose a Loan Type

then
get
your

Your Credit Score

Do you know what's on
your credit report?
Get Credit Score Button
Get Credit Score Button
FHA.com is a privately owned website, is not a government agency, and does not make loans.

FHA One-Time Close Construction Loans

10 Reasons a Home Builder Can Benefit

Since its inception in September 2001, FHA.com has become a valuable tool for news and information pertaining to FHA mortgage products. Our site offers knowledgeable FHA lenders who specialize in FHA lending the ability to connect with potential customers in need of FHA mortgage loans. These fully licensed lenders offer complimentary pre-approvals to their customers in the comfort they need to shop for their home with confidence.

In our constant desire to find trends within the FHA home purchase market, we have done some extensive market research on the FHA One-Time Close Construction to Permanent Loan product and wanted to share our findings.

FOR HOMEBUYERS

Here are the top 10 reasons a buyer would choose to build a new home rather than buy a resale home:

  1. The buyer can design and build a brand-new home versus a resale with the same FHA credit requirements and low 3.5% required down payment.
  2. Gifts are allowed for 100% of the needed 3.5% required down payment.
  3. Up to 6% seller/builder contribution for borrowers’ closing costs & prepaids.
  4. Credit scores can be as low as 620.
  5. FHA offers more flexible underwriting requirements with relaxed debt ratios.
  6. No reserve requirement.
  7. The buyer makes no payments until construction is complete.
  8. The permanent FHA loan closing is done one-time before construction begins.
  9. No re-qualifying or document updates needed whatsoever.
  10. Interest rate is protected during construction.

FOR BUILDERS

We spoke with many mortgage companies who have years of experience and have closed these FHA One-Time Construction Loans. We found that the FHA One-Time Close Loan is one of the best products on the market that very few people know about. While there are many educated and knowledgeable loan officers and /or companies that offer this product, there are only a select few that truly understand the entire process. We have written several articles about the FHA One-Time Close product and gave our visitors the ability to be put in touch with a licensed FHA One-Time Close lender in their area.

The response has been excellent during our 6-month test pilot. We successfully matched 200+ qualified OTC leads who desired to be matched with one knowledgeable lender in their jurisdiction. The feedback on the quality of the potential borrowers was excellent, yet in most cases, the borrower still had not found a lot and/or an approved FHA builder.

For example, a qualified couple desired to build a new home in Las Cruces, New Mexico in Dona Ana County utilizing the FHA One-Time Close program. Introductions were made to the licensed lender in New Mexico and the couple were pre-approved. Then the process started for the lender to find a qualified builder willing to work with their client. We are simply trying to expedite the match.

Qualified builders who want to build stick/site build homes utilizing the One-Time Close Program offered by the FHA now have a new avenue for attracting additional clients simply by completing a no-cost form and once approved, giving this financing option to the buyer. So, if you are a builder in Las Cruces, New Mexico, you can sign up to be an approved One Time Close approved builder with one of the largest FHA One-Time Construction Administrative companies in the country.

Once the builder is approved and meets the guidelines set forth by the lenders, the benefits start immediately. The next time our company gets a request for an FHA One-Time Close home loan in Las Cruces, New Mexico, or better yet (the next time a retail loan officer specializing in this product gets a request for an FHA One-Time Close loan in Las Cruces who wants to build, communication to the consumer will include your firm as an approved builder in that jurisdiction. In addition, you will be able to direct future customers who want to take advantage of the FHA One-Time Close to a licensed mortgage banker in your area that has expertise in the One-Time close construction process and can fulfil this loan request. Signing up would be a win/win proposition.

For builders interested in receiving the FHA One-Time Close builder approval form, please send your request to [email protected]. Please include your complete company name, your first and last name, e-mail address, and contact telephone number.

Please note that the FHA One-Time Close Construction Program (investor requirement) only allows for single family dwellings (1 unit) – and NOT for multi-family units (no duplexes, triplexes or fourplexes).

SEE YOUR CREDIT SCORES   From All 3 Bureaus  

Do you know what's on your credit report?

Learn what your score means.


GET STARTED

FHA Loan Articles and Mortgage News

What Kinds of Houses Qualify for an FHA Loan?

August 20, 2019 - What kinds of houses qualify for an FHA home loan? The answer may surprise you since many people assume the types of homes they can buy are fully finished, typical suburban home. But you can purchase other types of properties, too. Do you know your options with an FHA loan?

One-Time Close Construction Loan Planning

July 28, 2019 - It’s true that even first-time home buyers can apply for an FHA One-Time Close construction loan to have a house built for them from the ground up. You don’t need to be an experienced homeowner to do this, but you’ll need to anticipate some required expenses for your new home.,

I'm Not a First-Time Homebuyer. Is the FHA Program for Me?

May 2, 2019 - The FHA mortgage program (including reverse mortgages, refinance loans, One-Time Close construction mortgages, and FHA rehab loans) does not refuse a potential borrower simply because they have borrowed before, have had a mortgage in the past, or already own property.

Buying a Multi-Unit Home With an FHA Mortgage

February 27, 2019 - Depending on your financial needs and goals, buying a multi-unit property with an FHA mortgage makes sense. After all, the FHA down payment requirements and FICO score rules are the same whether you are buying a single-unit home or a property with up to four living units.

FHA Construction Loans in 2019: A Borrower's Market?

February 12, 2019 - Are you thinking about an FHA One-Time Close construction loan to help build a home especially for you rather than buying an existing property?  House hunters with a dream home in mind may find 2019 to be a good year to explore home loan options.

FHA One-Time Close Construction Loans and Interest Rates

January 26, 2019 - Mortgage loan Interest rates can and do change on a daily basis; some of those changes are minor, others may result in a sharp upward or downward turn. The mortgage loan rates a borrower checks in the morning may not be the same rates as those posted later in the day.

FHA One-Time Close Construction Loan Rules for 2019

January 11, 2019 - FHA One-Time Close construction loans are available in 2019 at higher FHA loan limits than in 2018. This is good news for anyone who wants a low-down payment construction loan that features only ONE application and closing date.

House Hunting and Higher FHA Loans In 2019

January 6, 2019 - Whether you are a single career-minded homebuyer or a new family looking to purchase a starter home, 2019 may be a very good year to apply for a home loan thanks to higher FHA loan limits in most counties nationwide.

The Difference Between Construction Loans and Rehab Loans

December 13, 2018 - Borrowers who want to have a home built for them instead of buying an existing property should look into the FHA One-Time Close Construction Loan. Borrowers who want to remodel, repair, or renovate a home should consider buying and fixing a property with a rehab loan.

What Is a Conforming Loan Limit?

December 4, 2018 - No matter if the loan you’re interested in is an FHA One-Time Close construction loan, an FHA purchase loan for existing construction, or even a USDA home loan, you will encounter the phrase conforming loan in your home buying journey.

SEE YOUR CREDIT SCORES   From All 3 Bureaus  

Do you know what's on your credit report?

Learn what your score means.


GET STARTED

FHA.com Reviews

FHA.com is a one-stop resource for homebuyers who want to make the best decisions when it comes to their mortgage. With our detailed, mobile-friendly site, individuals can access information about different FHA products, the latest loan limits, and numerous other resources to make their homebuying experience easier. Take a look at some of the reviews from other FHA.com visitors!