August 13, 2020

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How Do You Get A One-Time Close FHA Construction Loan?

How Do You Get A One-Time Close FHA Construction Loan?How do you get an FHA construction loan? If you want to have a new home built from the ground up (as opposed to buying an “existing construction” home that already exists), an FHA new construction loan is possible. The FHA One-Time Close / Single-Close construction loan makes it much easier with a single application and closing for the entire project.

Other types of construction loans feature TWO closing dates and a more complex process. FHA One-Time Close mortgages simplify the construction loan by wrapping the entire loan process up with a single application and loan approval.

Not all FHA lenders offer construction loans, so you’ll need to shop around to find the right lender for your needs. There are two basic types of FHA construction loans-a “traditional” construction loan, and an FHA One-Time Close loan. Be sure to ask your chosen participating lender if she offers One-Time Close loans.

Discuss this as early in your application process as possible One-Time Close FHA mortgages have different requirements than the traditional construction loan including different FICO score requirements.

As mentioned above, FHA One-Time close construction loans have a single transaction for the entire process,  and the borrower is not required to qualify for two different loans. That’s a feature of other types of construction loans which may add risk in some cases if the borrower’s credit position, debt-to-income ratio, or other factors changes between the two loan approvals. For One-Time Close transactions, you will only have to qualify once.

For both types of FHA construction loans, you’ll find that the down payment rules, occupancy standards, escrow account requirements and other areas are similar. It is a very good idea to give yourself more time in the preparation process for new construction loans as you may wish to save up additional funds for any required compliance inspections, research construction timelines and typical start-to-close times, etc. One-Time Close loans may feature additional restrictions or requirements depending on the lender.

For example, some lenders will approve FHA One-Time Close loans for manufactured housing, others may require that the transaction be to purchase “stick-built” homes. Ask your lender if the type of home you seek is able to be built using this type of FHA mortgage.

Want More Information About One-Time Close Loans?

One-Time Close Loans are available for FHA, VA and USDA Mortgages.  These loans also go by the following names: 1 X Close, Single-Close Loan or OTC Loan.

We have done extensive research on the FHA (Federal Housing Administration), the VA (Department of Veterans Affairs) and the USDA (United States Department of Agriculture) 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. provides information and connects consumers to qualified One-Time Close lenders in an effort 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, VA and USDA 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:  Kit Homes, Barndominiums, Log Cabin Homes, Shipping Container Homes, Stilt Homes, Solar (only) or Wind Powered (only) Homes.

Your email to authorizes to share your personal information with a mortgage lender licensed in your area to contact you.

  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 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.
  4. Are you or your spouse (Co-borrower) eligible veterans? If either of you are eligible veteran’s, down payments as low as $0 may be available up to the maximum amount your debt-to-income ratio VA will allow – there are no maximum loan amounts as per VA guidelines.  Most lenders will go up to $750,000 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.

About was launched in 2010 by seasoned mortgage professionals wanting to educate homebuyers about the guidelines for FHA insured mortgage loans. Popular FHA topics include credit requirements, FHA loan limits, mortgage insurance premiums, closing costs and many more. The authors have written thousands of blogs specific to FHA mortgages and the site has substantially increased readership over the years and has become known for its “FHA News and Views”.

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