Is it safe to apply for a One-Time Close construction loan during the coronavirus outbreak? Construction loans are offered for those who wish to apply for a home loan but don’t want to purchase existing construction.
These loans are available for FHA borrowers, VA borrowers, even USDA applicants who meet program requirements may be approved.
But what do you need to know about Construction loans during a time of national crisis such as the coronavirus?
You May Need To Allow For Additional Processing Time
Permitting and other official paperwork may be slow to be processed or approved depending on the government agency, demand, and local rules that may be in effect during a quarantine period, “stop movement”, or related restrictions aimed at slowing the spread of contagion.
Don’t assume you will get your paperwork handled in the usual manner unless you have been specifically told otherwise by the service provider.
You May Be Required To Adjust The Timeline Of Your Project
Depending on the availability of raw materials, crews, and other factors, your construction project may be delayed in the interim while your city or state government decides how to proceed. From the time ground is broken to completion you could encounter many different minor delays that add up to a longer timeline to complete.
An Outbreak May Directly Affect Your Construction Project
You or your contractors may be directly affected by the spread of a contagious disease. It’s never safe to assume this will NOT happen and it’s a contingency to realistically plan for in certain cases.
Are you afraid of watching your construction project slow down in such situations? It is never a good idea to be in a hurry with a construction loan in the first place, but during unprecedented times (like now,) it’s best to assume delays can and will definitely occur.
Construction Loans Take Time Even In Ideal Conditions
Your project may experience delays that have absolutely nothing to do with current concerns. There are plenty of mundane things that hold up progress–permits may be slow coming, crews lose or exchange members, you may have local ordnances to comply with that take time to address, etc.
Any number of typical delays common to the construction process are possible. Add to that the X-factor of something like coronavirus and you have a situation where you will need to anticipate the common and uncommon delays.
One of the best things you can do if you are getting ready to submit an application for a construction loan is to ask your lender what complications you might need to expect when applying NOW. Is it better to wait until things get back to something close to normal? That is a question that can only be answered on a case-by-case basis.
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.
Your email to email@example.com authorizes FHAnewsblog.com to share your personal information with a mortgage 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 $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.