Did you know that FHA home loans can help you buy an existing home as a first-time home buyer, but can also help a first-timer or experienced homeowner have a house built for them from the ground up on your own lot or a lot you purchase in connection with the mortgage.
It’s also possible to have a manufactured home assembled for you on a lot you purchase or already own.
These loans, especially the FHA One-Time Close mortgage for building a home from the ground up, are offered to both experienced borrowers and first time home buyers alike with no difference in the basic terms and conditions.
That means that a first-time borrower is not penalized for being a first-timer; there are no elevated down payment requirements, no added closing costs, or additional fees for being a new borrower OR for NOT being one.
If you want to have a home built or assembled for you, it’s a good idea to know in advance how quickly you need to be living in the home; these types of home loans are well worth the effort, but borrowers should not expect the process to go as quickly as one where the borrower wants a house already completed and ready for occupancy.
Why are there longer processing times for construction loans and manufactured homes? Manufactured homes must be shipped directly from the dealer or manufacturer to the site where they will be situated; these homes must be permanently affixed to an approved foundation.
This process (including the transportation of the home to the lot) can be more time consuming than waiting for the owner to vacate an existing property so you can move in. The waiting factors for construction loans may include how long it takes to process building permits. Certain busy housing markets may have longer waiting times.
And then there’s the overall construction time needed to build your dream home, accomplish compliance inspections, etc.
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.
FHANewsblog.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 allow
s 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.
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- 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 $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.