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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.

FHA Loan Programs for 2022

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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

Is an FHA One-Time Close Construction Loan Right for You?

May 8, 2022 - Some people aren’t sure which home loan product is right for them. In some cases it’s a question of supply and demand; if you seek an FHA manufactured home loan in New York City you are likely to be disappointed. But what about less obvious issues?

FHA Loan Tips for First-Time Homebuyers

April 21, 2022 - If you are looking for a home loan that has no early payoff penalty and more flexible credit requirements, it’s smart to consider an FHA mortgage. These mortgages help you purchase a new home, a fixer-upper, or have a house built from the ground up on your own lot.

FHA One-Time Close Construction Loan Limits: Higher in 2022

April 18, 2022 - Do you want to build a home from the ground up? You can do this with low down payment requirements with an FHA One-Time Close Construction Loan. And construction loan borrowing power has increased in 2022 because FHA loan limits have increased from the previous year.

FHA Home Loan Types

April 3, 2022 - When it comes to your FHA home loan options, there are many different property types you can buy with an FHA home loan. And even though you can choose from a diverse range of options for many of them there is one type of Single-Family Mortgage loan that is used to buy the property.

Pay Attention to Your Debt-To-Income Ratio

February 12, 2022 - Your FHA loan options in 2020 include new purchase loans, reverse mortgages, cash-out FHA refinance loans, and the One-Time Close construction loan if you want a house built for you. But planning ahead is key and you will need to examine and work on the amount of debt you carry