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The FHA One-Time Close Loan helps contractors with a smooth, start-to-finish process that allows consumers to purchase and build a home with a single mortgage. Builders can make contributions of up to 6% toward closing costs and prepaid items.

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August 19, 2019
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FHA.com is a privately owned website, is not a government agency, and does not make loans.

Builder Benefits for FHA One-Time Close Loans

FHA Construction Loans for Building Homes

FHA One-Time-Close Loans - Builder Benefits

The FHA Construction-to-Permanent program is an avenue that many builders should explore when looking for additional business. By partnering with pre-approved homebuyers, contractors can take advantage of a smooth, start-to-finish process that allows consumers to purchase and build a home according to their liking, all in a single mortgage.

Builder Benefits

When building a home, most conventional mortgages require the borrower to qualify twice—once for the construction loan and again for the purchase. The FHA One-Time Close Loan, on the other hand, skips the tedious requalification process, which involves a second credit check and presentation of documents. Not only is this a cost and time saving step, but it also protects builders involved in the loan against unforeseen circumstances, such as buyers losing their jobs or taking a hit to their credit scores.

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. The high, 6-percent threshold allows buyers to receive the same financing without having to forfeit contributions.

Borrowers can take advantage of FHA’s lenient underwriting criteria, such as lower debt-to-income ratios compared to other conventional loan types. These perks make the FHA One-Time Close Loan appealing to many potential homebuyers, making it an opportunity for builders to gain contracts.

When financing with a Construction-to-Permanent loan, funds are drawn in phases, up to 5 times. A draw schedule is created by the lender, which the buyer and builder agree to. This ensures that all contractors are paid on time, as the project progresses.

Among the many advantages that come with an FHA loan, builders and buyers understand that the low down payment requirement is 3.5 percent. Additionally, the entire amount can be covered in gift funds which attracts more consumers.

There is a growing number of individuals that have an immediate need for small- to mid-size homes built from scratch. FHA.com works with licensed FHA lenders who specialize in the One-Time Close Loan process to pre-approve potential homebuyers looking for builders to do the job. Builders have an opportunity to be first in line to be paired up with these individuals and take on projects that would otherwise fly under the radar.

For Builders interested in receiving the FHA One-Time Close Builder registration approval form, please send your request to [email protected].

One-Time Close Construction Loans

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FHA Loan Articles and Mortgage News

One-Time Close Construction Loan Planning

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.,

I'm Not a First-Time Homebuyer. Is the FHA Program for Me?

May 2, 2019 - The FHA mortgage program (including reverse mortgages, refinance loans, One-Time Close construction mortgages, and FHA rehab loans) does not refuse a potential borrower simply because they have borrowed before, have had a mortgage in the past, or already own property.

Buying a Multi-Unit Home With an FHA Mortgage

February 27, 2019 - Depending on your financial needs and goals, buying a multi-unit property with an FHA mortgage makes sense. After all, the FHA down payment requirements and FICO score rules are the same whether you are buying a single-unit home or a property with up to four living units.

FHA Construction Loans in 2019: A Borrower's Market?

February 12, 2019 - Are you thinking about an FHA One-Time Close construction loan to help build a home especially for you rather than buying an existing property?  House hunters with a dream home in mind may find 2019 to be a good year to explore home loan options.

FHA One-Time Close Construction Loans and Interest Rates

January 26, 2019 - Mortgage loan Interest rates can and do change on a daily basis; some of those changes are minor, others may result in a sharp upward or downward turn. The mortgage loan rates a borrower checks in the morning may not be the same rates as those posted later in the day.

FHA.com Reviews

FHA.com is a one-stop resource for homebuyers who want to make the best decisions when it comes to their mortgage. With our detailed, mobile-friendly site, individuals can access information about different FHA products, the latest loan limits, and numerous other resources to make their homebuying experience easier. Take a look at some of the reviews from other FHA.com visitors!