Preparing for an FHA One-Time Close Loan
The FHA version has the same down payment requirements as any other FHA loan including mobile home and condo unit loans.
How do you prepare for an FHA One-Time Close loan? The process is similar to an existing construction mortgage, with some extra consideration along the way for the time it may take to secure architectural plans, building permits, and contractors.
Start Saving for Your Down Payment As Early as You Can
There are several reasons for this--the bigger down payment you make on your dream home, the less the loan will cost over the loan term. But some borrowers need to save on up-front costs and may only wish to put the minimum amount down.
In many cases a borrower may consider a local down payment assistance program but for construction loans some lenders may not permit down payment assistance--ask before you plan on money coming from other sources than your own savings.
You may also have access to state or local tax breaks or other incentives as a first-time home buyer or a borrower who has not owned property in a while. Investigate your local options in the planning stages to see where you can save money or get financial assistance (where applicable).
Learn How Much Home Loan You Can Realistically Afford
You can use an online mortgage calculator to determine what your monthly payments might look like including property taxes, mortgage insurance premiums, and other expenses that may affect your mortgage amount.
Avoid New Credit and Pay Down Your Existing Credit Accounts
Like any home loan prep, getting ready for a One-Time Close construction loan means working on your credit through credit monitoring, reducing your card balances, and avoiding new debt. THe lender looks at both your credit scores and your credit history--don’t come to the application process with new credit accounts opened in the last year for better results with home loan application approval.
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), the VA (Department of Veterans Affairs) and the USDA (United States Department of Agriculture) 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.
FHA.com provides information and connects consumers to qualified One-Time Close lenders in an effort 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, VA, and USDA One-Time Close Construction Program only allow
Your email to [email protected] authorizes FHA.com to share your personal information with a mortgage lender licensed in your area to contact you.
- Send your first and last name, e-mail address, and contact telephone number.
- Tell us the city and state of the proposed property.
- 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.
- 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 $750,000 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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