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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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November 17, 2019
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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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July 28, 2019 - It’s true that even first-time home buyers can apply for an FHA One-Time Close construction loan to have a house built for them from the ground up. You don’t need to be an experienced homeowner to do this, but you’ll need to anticipate some required expenses for your new home.,

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July 16, 2019 - The One-Time Close construction loan, an option for FHA loan applicants, VA loan applicants, and USDA borrowers, offers the ability to have a home built from the ground up. Is this the right choice for you? Some borrowers have a sense of urgency about getting moved into a new home.

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June 20, 2019 - FHA / VA / USDA One-Time Close construction loans are an important option to consider for those looking to build  a new home in Texas. Texas home values have gone up 5.6% over the past year and Zillow predicts they will rise 4.0% within the next year.