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Is there really a construction loan that lets you build a house on your own lot with no loan limit? AND a zero-down loan at that? Believe it or not, such a loan DOES exist. It’s the VA Construction Loan, which can be offered as a One-Time Close mortgage.

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One-Time Close Construction Loans: No Loan Limits?

January 21, 2020

One-Time Close Construction Loans: No Loan Limits?
Is there really a construction loan that lets you build a house on your own lot with no loan limit? AND a zero-down loan at that?

Believe it or not, such a loan DOES exist. It’s the VA Construction Loan, which can be offered as a One-Time Close mortgage featuring only one application and closing date for the mortgage. But what is the catch?

It’s true that the VA One-Time Close construction loan permits a no down payment mortgage with no VA-imposed loan guaranty limit. But these loans are only open to qualifying military members or veterans, certain surviving spouses of military members or veterans, military retirees, etc.

VA mortgages are one of the perks of military service and a zero down construction loan can be a huge advantage.

The Department of Veterans Affairs changed the VA loan program starting in 2020 by, among other things, removing VA-imposed loan guaranty limits. It is now possible to buy a home using a VA loan and negotiate the loan amount with the lender without the previous by-county limit.

That does not mean you have limitless borrowing power since the lender must determine you can realistically afford the loan, But it does mean more flexibility in your house hunting options.
Naturally, some borrowers intrigued by a zero-downpayment home loan with no mortgage loan limit are disappointed to learn that only qualifying members of the military community have access to these construction loans.

But there ARE other options. The FHA One-Time Close construction loan does not feature a zero-down option, but the down payment requirement for FHA construction loans is a low 3.5% of the asking price for borrowers who qualify.

And on top of that, you may be able to get down payment assistance from a local program near you.

FHA construction loans are open to any financially qualified borrower. You do not have to have a financial need, you don’t need to be a low-income borrower, and there are no income caps on FHA mortgages. Some people confuse USDA loans with FHA mortgages--USDA loans ARE need-based, but FHA loans are NOT.

Talk to a lender about your construction loan options today--you might be surprised to learn about the options open to you to buy or build.


Construction Loans at OneTimeClose.com FHA, VA, and USDA: One-Time Close Loans


Learn More About FHA One-Time Close Construction Loans

We have done extensive research on FHA One-Time Close mortgages and spoke directly to the 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 [email protected] authorizes FHA.com to share your personal information with a licensed mortgage lender in your area to contact you.

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

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.

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