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Build A Home On Your Own Land With A One-Time Close Construction Loan

Build A Home On Your Own Land With A One-Time Close Construction Loan

A construction loan to build a house on your own land is not out of reach even for a first-time homebuyer.

There are multiple options for building a home from the ground up; you can apply for an FHA One-Time Close loan, a VA construction loan, and there are even USDA construction loans that allow qualified borrowers (this is a need-based loan) to build a house instead of buying an existing one.

But there are some mistakes some house hunters make when pursuing a construction loan you should avoid; sidestepping these can definitely help you save time and money.

Save Early For Your Down Payment

Some construction loans (VA and USDA) have no down payment requirement. All others do.

And even the VA and USDA equivalents of an FHA One-Time Close mortgage may require a down payment if your loan needs exceed the loan guaranty limits for your area. Saving early is a very smart choice.

And it’s not just the down payment you need to be concerned with; saving early means anticipating certain closing costs, fees, and expenses you will need to anticipate.

Start saving early even for a VA 0% down loan. A no down payment loan is a big advantage, but there are still closing costs to think about even with no money down construction loans.

Get Pre-Approved As Early As Possible

If you start trying to find an approved contractor or an architect without pre-qualifying, you could be hurting your chances at loan approval if for no other reason than you don’t have a realistic idea of how much loan you can afford.

If you start planning a big home but only have the borrowing power to accomplish a portion of your build-on-your-own-land ambitions, you may be forced to seriously reconsider your project. Get pre-approved for your construction loan first.

Ask How Long It Will Take To Get Permits And Other Required Paperwork

You can’t just hire a contractor, get a loan, and start working. You will need all proper licensure, permits, and other paperwork as required by the state or local authority. Loan approval is contingent on your having all required permits and meet any other needs as directed by state or local laws.

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.
Joe Wallace - Staff Writer

By Joe Wallace

November 13, 2019

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for for (8) years and is currently the Associate Editor for

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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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