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Are you thinking of using an FHA One-time Close Construction loan to have a house built for you in 2018? This type of home loan is different than FHA new purchase loans for existing construction, but it’s definitely worth considering.

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FHA One-Time Close Construction Loans for 2018

FHA One-Time Close Construction Loans for 2018
October 29, 2017 - FHA construction loans can be a bit more complex, but thanks to the FHA One-time Close construction loan this process isn't as complicated as other types of construction loans. Why?

There Is Only One Application and Closing Date For FHA One-time Close Construction Loans in 2018

The FHA One-time Close construction loan (also known as a "construction-to-permanent" mortgage) does NOT require the borrower to qualify twice. For other types of construction loans the borrower applies once to pay for the construction, then applies again for the mortgage itself.

Under such loans there are two closing dates, and two qualification processes. That’s something that understandably makes some borrowers nervous-what if there are complications with the second application?

FHA Construction-to-permanent loans avoid all that by using a single loan, one closing date, and specific steps and requirements for how the loan is to proceed into construction phase and what happens once the work is completed.

FHA One-time Close Mortgage Escrow Account Requirements

An escrow account is required to pay the expenses of construction and related fees. There must be “draws” to pay for the appropriate phase of the work, and a payment timeline that you and your loan officer will discuss.

Not the Same Payment Requirements as Other Mortgages

Generally speaking, the borrower is not to begin mortgage payments until a specified time after the final inspection of the completed work (usually 60 days). You will negotiate the specifics of this with your lender.

Maximum Mortgage Amounts for 2018

FHA One-time Close construction loan maximums are calculated as described in HUD 4000.1:

"The Mortgagee must use the lesser of the Property Value or the documented Acquisition Cost to determine the Adjusted Value."

The documented Acquisition Cost of the Property includes:
  • Builder’s price or the sum of all subcontractor bids and materials;
  • Value of the land as shown in the site value of the appraisal; and
  • Interest and other costs associated with a construction loan obtained by the Borrower to fund construction.
Learn More About FHA One-time Close Construction Loans

We have done extensive research on FHA One-time Close mortgages and have compiled a list of licensed lenders for most states. These are qualified mortgage loan officers who work for lenders that know the product well.

Each company has supplied us the guidelines for their product. If you are interested in being contacted by one licensed lender in your area, please respond to the below questions to save time. All information is treated confidentially.

Your response to onetimeclose@fha.com authorizes FHA.com to share your personal information with a licensed mortgage lender 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 credit score and/or the Co-borrower’s credit score, if known. 620 is the minimum qualifying credit score for this product.

4. Are you or your spouse (Co-borrower) eligible veterans?

5. If either of you are eligible veteran’s, the down payment is $0 up to the maximum VA lending limit for your county. If not, the FHA down payment is 3.5% up to the maximum FHA lending limit for your county.