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The FHA One-Time Close Loan is a secure, government-backed mortgage program for construction projects. All FHA products have the same requirement, but lenders can place additional guidelines on these loans.

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January 21, 2020
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FHA.com is a privately owned website, is not a government agency, and does not make loans.

About FHA One-Time Close Construction Loans

A Construction Loan Backed By the Government

About FHA One-Time-Close Loans

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 (no single wide mobile homes), and modular homes. It allows borrowers to finance for the construction, lot purchase (if necessary) and permanent loan into one loan and a single closing all at once with a minimum down payment of 3.5 percent (up to the FHA county lending limits).

Most construction loans require two separate closings—once to qualify for the construction itself, and again when converting into a permanent mortgage. When the builder gives the clear to close on a home and it’s time to move in, the buyer has to pay off the construction loan and apply for a new mortgage. These regular construction loans come with two closing dates, and require the homebuyer to requalify with credit checks, verification of employment, additional closing costs, etc.

The One-Time Close Loan gives buyers a new option. The FHA handbook, HUD 4000.1, refers to this as a “construction-to-permanent” mortgage. This is 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. An escrow account is required to pay the expenses of construction and related fees, and the borrower will not be obligated to make mortgage payments until a specified time after the final inspection of the completed work (usually within 60 days).

Getting Ready

All FHA products have the same requirement, but lenders can place guidelines in addition to those minimum FHA standards. The usual advice about not having any late or missed payments 12 months leading up to your home loan application is appropriate in this case. To get ready for a construction loan, it’s good to work hard on reducing debt-to-income ratios, avoid applying for new lines of credit, and pay close attention to your credit report to avoid delays because of errors, outdated information, or other problems.

Contact Us About One-Time Close Loan Opportunities

We have done extensive research on both the FHA One-Time Close Construction program as well as the VA (Department of Veterans Affairs) One-Time Close Construction program. We spoke directly to the licensed lenders that originate these residential loan types in 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 licensed in your area to contact you.

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 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? 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.

One-Time Close Construction Loans

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FHA Loan Articles and Mortgage News

Applying for a One-Time Close Construction Loan in 2020

January 9, 2020 - FHA One-Time Close construction loans are intended to help those who want to own and occupy a home to build from the ground up on their own land. There is also a VA loan equivalent to the FHA construction loan that, starting in 2020, features no down payment.

Five FHA Loan Rules for Down Payments

December 26, 2019 - What do you need to know about the FHA home loan rules for down payments? The first thing to remember is that down payments are required on all FHA purchase loans whether for a Condo loan, a One-Time Close construction loan, or other types of FHA loan used to buy or build a house.

One-Time Close Construction Loan Mortgage Payments

December 20, 2019 - One-Time Close loans are meant to streamline the construction loan process by eliminating the need for a separate loans. They reduce two applications, two loan approvals, and two closing dates into a single loan with no worries about being denied for the second loan.

What's the Difference Between Construction Loans and Rehab Loans?

December 16, 2019 - One-Time Close constuction loans and rehab loas both require the use of a contractor, require plans, approved project details, and a period of time where the home may not be habitable while the construction or rehabilitation work is happening.

FHA One-Time Close Construction Loans for 2020

December 15, 2019 - Are you thinking of using an FHA One-Time Close Construction loan to have a house built for you in 2020? This type of home loan is different than FHA new purchase loans for existing construction, but it’s definitely worth considering.