FHA One-Time Close Loans
Financing for Construction, Lot Purchase, and a Permanent Mortgage
The FHA One-Time Close Loan is a secure, government-backed mortgage program available for one-unit, stick-built primary residences, new manufactured housing for primary residences (excludes single wide mobile homes), and modular homes.
It allows borrowers to finance for the construction, lot purchase (if necessary), and permanent loan into a single mortgage. It provides for a single all-at-once closing with a minimum down payment of 3.5 percent (up to your FHA county lending limit).
About the FHA One-Time Close Program
The One-Time Close Loan gives buyers a new option -- a single loan with one single closing date, and a defined set of parameters for how the loan is to proceed during the construction phase and beyond.
Most construction loans require two separate closings—once to qualify for the construction itself, and again when converting into a permanent mortgage. The One-Time Close Loan gives buyers a new option.
- Construction Loan Rules for First-Time Buyers
- Five Important FHA and VA Construction Loan Approval Questions
- How Much Down Payment Do I Need to Build My Home?
One-Time Close - Buyer Benefits
Many potential borrowers aren't aware that they have the option of building their dream home as a part of a single, consolidated home loan. The FHA One-Time Close Loan offers them a number of advantages in doing so.
Homebuyers can also take advantage of the FHA’s lenient qualifications, such as easy credit qualifying for scores, more flexible guidelines for homebuyers’ work histories, small escrow reserve requirements, and debt-to-income ratios up to 50 percent.
- FHA One-Time Close Mortgages and Credit Issues
- FHA Construction Loans Compared With FHA 203(k) Rehab Loans
- FHA Construction Loans Compared With FHA New Purchase Loans
One-Time Close - Builder Benefits
The FHA Construction-to-Permanent program helps contractors with a smooth, start-to-finish process that allows consumers to purchase and build a home according to their liking, all in a single mortgage.
Sellers and builders can make contributions of up to 6 percent toward the homebuyer’s closing costs and prepaid items. Any contribution funds beyond that are reduced, dollar-for-dollar, from the loan amount.
- FHA Construction Loan Rules and Lender Requirements
- FHA One-Time Close Construction Loan Rules to Know
- FHA, VA, and USDA Construction Loan Options
Build a Home on Your Own Lot
If you already own a plot of land on which you intend to build a home, you are a step ahead in the process. Your land equity will cover the 3.5% down payment requirement for an FHA One-Time Close loan.
The most important step in building a home on your own lot is selecting the contractor. A licensed general contractor has a wealth of knowledge and is going to be your best resource in selecting the land to build on, giving you floorplan options, and guiding you in making the best decisions.
- Build a House on Your Own Land With an FHA Loan
- Advice About One-Time Close Construction Loans
- One-Time Close Loans: USDA, VA, and FHA
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 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 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 allows 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, including but not limited to: Kit Homes, Barndominiums, Log Cabin Homes, Shipping Container Homes, Stilt Homes, Solar (only) or Wind Powered (only) Homes, Dome Homes, Bermed Earth Sheltered Homes, Tiny Homes, Accessory Dwelling Units, or A-Framed Homes.
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- 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 will allow per VA guidelines. While there are no maximum loan amounts, most lenders will go up to $1,000,000 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.