August 1, 2021

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One-Time Close Construction Loan Availability In 2021

Here is a commonly asked question about One-Time Close construction loans; “I want to build my home instead of buying it but my lender says they won’t do a construction loan”. Or conversely, “I want to use a VA mortgage to build a home but the lender says they don’t offer VA construction loans. Can they do that?”

If you are interested in building a home from the ground up instead of buying an existing property, you can use the One-Time Close construction mortgage to do so and there are a variety of options including both VA loans and FHA construction loans.

People gravitate toward these mortgages because of more forgiving FICO score rules and lower down payment requirements.

But not all lenders offer FHA mortgages or VA home loans; it is up to the lender to choose to offer these products. A participating VA or FHA lender (some offer both) can choose to offer some, all, or none of the available home loan products within these programs.

And some will offer certain loans but not others. In areas where a mobile home loan isn’t in demand, the lender may choose not to offer them. The same is true for condo loans or even construction loans.

That is one very good reason why it pays to shop around for a participating lender (see below). You may know exactly what you want from your home loan journey, but if your current lender can’t help, you will need to explore your options.

FHA and VA loan programs encourage this as terms and conditions may vary from lender to lender.

You will want to shop around not just for a lender who can offer the loan you need, but also one who offers you favorable terms including interest, discount points, etc.

When shopping around for a lender, be sure to ask about their credit score requirements for the construction loan and how those requirements match the ones for existing construction.

You should also ask about issues related to the time of completion–how soon between loan closing and the time when you can anticipate moving in. Be sure to ask what a typical move-in time is and not just the general times promised by contractors in the past.

You may find that certain delays should be anticipated–especially if your housing market has a high demand for construction permits.

It’s not that the process will take an unreasonably long amount of time, but you should definitely manage your expectations early. Some mistakenly assume they can close the deal and expect to move in much sooner than is realistic for a construction loan. Ask the lender what’s typical in her experience.

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 veterans, 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

January 6, 2021

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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