May 17, 2022

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FHA One-Time Close Construction Loan Limits Are Higher In 2022

The FHA Loan That Helps You Build On Your Own Lot

If you want to build a home from the ground up using an FHA One-Time Close Construction Loan, there’s good news for you in 2022. Your buying power has increased thanks to FHA loan limits published at the start of the new year.

The Department of Housing and Urban Development issues updated FHA loan limits on an annual basis. The limits vary depending on whether the housing market in a given zip code is considered typical, high-cost, or low-cost. In 2022, the limits for all FHA forward mortgages (including FHA One-Time Close Construction Loans() increased in many areas across the USA.

FHA loan limit calculations include a nationwide forward mortgage limit ‘floor’ and ‘ceiling’ for a one-unit property. If you want an FHA One-Time Close Construction Loan in 2022, the floor is $420,680 in America’s low-cost housing markets. The ceiling is  $970,800 for high-cost areas.

The FHA loan limit floor is 65% of the national conforming loan limit of $647,200 for a single-unit property, but multi-unit properties in low-cost areas have higher limits:

  • Two-unit: $538,650
  • Three-unit: $651,050
  • Four-unit: $809,150

Multi-unit loan limits apply for those purchasing new construction or existing construction homes, but you may find that for FHA One-Time Close loans, loan approval may be limited to single-unit properties.

For high-cost areas (which also feature higher loan limits for multi-unit properties), FHA mortgage limits are established at 150% of the national conforming loan limit in 2022. If you are interested in a Construction Loan, the single-unit limit is the number you want.

  • One-unit: $970,800
  • Two-unit: $1,243,050
  • Three-unit: $1,502,475
  • Four-unit: $1,867,275

“Special exception areas” including Hawaii, Alaska, Guam, and the Virgin Islands are more expensive and require additional consideration. The higher loan limits for these areas are:

  • One-unit: $1,456,200
  • Two-unit: $1,864,575
  • Three-unit: $2,253,700
  • Four-unit: $2,800,900

As mentioned above, FHA Construction Loans may not be approved by participating lenders for projects with more than a single unit.

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. This type of loan allows you to finance the purchase of the land along with the construction of the home. You can also use land that you own free and clear or has an existing mortgage.

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 with 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 one licensed construction lender in your area, please send responses to the questions below. All information is treated confidentially.

OneTimeClose.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 for single-family dwellings (1 unit) – and NOT for multi-family units (no duplexes, triplexes, or fourplexes). You CANNOT act as your own general contractor (Builder) / not available in all states.

In addition, this is a partial list of the following homes/building styles that are not allowed under these programs:  Kit Homes, Barndominiums, Log Cabin or Bamboo Homes, Shipping Container Homes, Dome Homes, Bermed Earth-Sheltered Homes, Stilt Homes, Solar (only) or Wind-Powered (only) Homes, Tiny Homes, Carriage Houses, Accessory Dwelling Units and A-Framed Homes.

Your email to info@onetimeclose.com authorizes Onetimeclose.com to share your personal information with a mortgage construction 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 $1,000,000 and review higher loan amounts on a case-by-case basis. If not an eligible veteran, the FHA down payment is 3.5% up to the maximum FHA lending limit for your county.
Bruce Reichstein - FHA News Author

By Bruce Reichstein

April 5, 2022

Bruce Reichstein has spent over three decades as an experienced FHA and VA home loan mortgage banker and underwriter where he was responsible for funding “Billions” in government backed mortgage loans. He is the Managing Editor for FHANewsblog.com where he educates homeowners on the specific guidelines for obtaining FHA guaranteed home loans.

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About FHANewsBlog.com
FHANewsBlog.com 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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