May 22, 2018
Is United States citizenship required for an FHA One-Time Close / Single-Close construction loan? This issue does not affect all potential FHA borrowers, but it’s a very important one to address, especially given controversy in the news over a variety of societal concerns.
Before we get to the specifics of whether or not citizenship is required for an FHA One-Time Close / Single-Close mortgage or ANY type of FHA home loan, refinance loan, or FHA reverse mortgage, it must be noted that FHA home loans are approved on the basis of a borrower’s ability to financially qualify and afford the mortgage.
The borrower must be able to legally commit to binding agreements including the loan contract itself, and be of sufficient legal age in the state the transaction is to be carried out in.
At least one borrower obligated on the mortgage loan must take up residence in the home secured by the FHA loan as his or her primary residence/principal residence.
FHA loan rules in HUD 4000.1 break down certain circumstances a borrower may fit into and defines the eligibility of a potential borrower in such cases related to the citizenship question. We will address these issues in a similar manner.
FHA Loan Citizenship Rules For Loan Approval
At the most basic level, FHA loan rules specifically and unequivocally state:
“U.S. citizenship is not required for Mortgage eligibility.”
This rule is found in HUD 4000.1 on page 133. This is good news for those who are in the United States as legal permanent or non-permanent “resident aliens” as described in the FHA loan rulebook.
FHA Loan Rules For Legal Permanent Resident Aliens
HUD 4000.1 states clearly, “A Borrower with lawful permanent resident alien status may be eligible for FHA-insured financing provided the Borrower satisfies the same requirements, terms and conditions as those for U.S. citizens.” The lender will be required to obtain certain documentation to verify this status.
FHA Loan Rules For Legal Non-Permanent Resident Aliens
HUD 4000.1 states, “A Borrower who is a non-permanent resident alien may be eligible for FHA-insured financing provided:
- the Property will be the Borrower’s Principal Residence;
- the Borrower has a valid SSN, except for those employed by the World Bank, a foreign embassy, or equivalent employer identified by HUD;
- the Borrower is eligible to work in the United States, as evidenced by the Employment Authorization Document issued by the USCIS; and
- the Borrower satisfies the same requirements, terms and conditions as
those for U.S. citizens.
FHA Loan Rules For Non-U.S. Citizens Without Legal Residency In The United States
HUD 4000.1 states, “Non-U.S. citizens without lawful residency in the U.S. are not eligible for FHA-insured Mortgages.”
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. This type of loan allows for you to finance the purchase of the land along with the construction of the home. You can also use land that you own free and clear or has an existing mortgage.
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 to one licensed construction lender in your area, please send responses to the questions below. All information is treated confidentially.
OneTimeClose.com 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). You CANNOT act as your own general contractor (Builder) / not available in all States.
In addition, this is a partial list of the following homes/building styles that are not allowed under these programs: Kit Homes, Barndominiums, Log Cabin or Bamboo Homes, Shipping Container Homes, Dome Homes, Bermed Earth-Sheltered Homes, Stilt Homes, Solar (only) or Wind Powered (only) Homes, Tiny Homes, Carriage Houses, Accessory Dwelling Units and A-Framed Homes.
Your email to info@onetimeclose.com authorizes Onetimeclose.com to share your personal information with a mortgage construction lender licensed in your area to contact you.
- Send your first and last name, e-mail address, and contact telephone number.
- Tell us the city and state of the proposed property.
- 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.
- 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 $1,000,000 and review higher loan amounts on a case by case basis. If not an eligible veteran, the FHA down payment is 3.5% up to the maximum FHA lending limit for your county.
Bruce Reichstein has spent over three decades as an experienced FHA and VA home loan mortgage banker and underwriter where he was responsible for funding “Billions” in government backed mortgage loans. He is the Managing Editor for FHANewsblog.com where he educates homeowners on the specific guidelines for obtaining FHA guaranteed home loans.
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