December 2, 2021

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One-Time Close Construction Loans: Loan Limits

One Time Close Mortgage Loans: The Base Home Sales Price

Are you a house hunter who has gotten tired of looking at other people’s dream homes? Do you want to build your home instead of buying someone else’s?

The One-Time Close construction loan is a good option for this; the One-Time Close loan eliminates the need for a second loan application and approval process compared to some other types of construction loans. 

There is more than one type of One Time Close mortgage to choose from–you could be eligible for a One-Time Close construction mortgage in multiple programs. Do you know which one is best for you?

USDA One-Time Close Construction Loans

We start with the need-based construction loan program offered by the USDA. The USDA One-Time Close construction loan program was created for borrowers on restricted incomes.

This construction loan features no down payment requirement. However, since this program offers need-based loans, income caps will apply.

This type of construction loan is ideal for low-income to moderate-income borrowers who meet the USDA’s need requirements AND have plans to build a home in an approved area.

When borrowing with a USDA construction loan, do you know how much you qualify for? That will depend on the price of the property, the loan limits in the zip code where you are building your home, and closing costs that you choose to include in the loan (where applicable). 

FHA One-Time Close Construction Loans

Some believe the FHA loan program is restricted in some way simiar to the USDA program, but this is not true. FHA One-Time Close loans are NOT need-based, have no maximum income caps, and are available with a very low minimum down payment requirement of 3.5%.

There’s another FHA loan myth that needs to be corrected–FHA Construction Loans do not require you to be a first-time home buyer.

The FHA loan program is not just for those who have never built a home before. You can own other property and still be approved for an FHA mortgage but the house you build with the loan must be your primary residence.

FHA One-Time Close loans allow you to build on your own land or on land you buy in conjunction with the mortgage. If you own your land and have equity built up in it, it is possible to use the land equity as a down payment. 

The amount you get approved for depends on both the FHA loan limits in the area where you are building as well as any closing costs you are permitted to include into the loan amount.

FHA loan limits are set by zip code and your ability to borrow with a construction loan is affected by loan limits–ask a lender what the limits are in your housing market or look the FHA Loan Limits up for your area.

VA One-Time Close Construction Loans

Starting in 2020, VA mortgages became unique among these One-Time Close loans. Why? It was in 2020 that the Department of Veteran’s Affairs eliminated the cap on the maximum lending limits for VA mortgages for those who have 100% of their VA loan entitlement to use on the transaction. 

At press time, VA mortgages have no loan limits in such circumstances. The no-loan-limit feature is NOT possible with FHA, Fannie Mae, or Freddie Mac conventional loans where the construction loan programs are capped by the county limits for each program.

You and the VA lender will negotiate the loan limit for your mortgage. No loan limits combined with no down payment required (the VA loan program does not require a down payment).

A participating VA lender offering this VA Construction Loan program can offer a maximum loan amount for $0 down VA construction loan that ranges from $750,000 on up to $1,500,000, so if you need to build a home instead of buying existing construction, talk to a participating VA lender to discuss this option. If you are a qualifying borrower (VA loans are for military members, veterans, and certain surviving spouses of military members who died as a result of military service) you could save a lot of money out of pocket for your construction mortgage.

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

March 31, 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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