December 13, 2018

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Articles Tagged With: FHA One-Time Close Construction Loan

FHA One-Time Close Construction Loan Rules

FHA One-Time Close Construction Loan Rules

What do borrowers need to know about FHA One-Time Close construction loans? There are two very important areas to keep in mind. One involves the lender’s specific requirements to qualify for this single-close construction loan, and the other involves FHA loan rules. The two are not always identical and this is something to be aware of when going into the loan application process. FHA One-Time Close mortgages are different than existing construction loans because the home must be designed, built, and paid for from the ground up and there are varying time frames under which this will be done. Purchasing an existing construction home means getting to move in much more quickly, but the trade-off is that you are purchasing someone else’s home rather than having one built especially for | more...

 
One-Time Close Mortgages: VA, FHA, And USDA Part Two

One-Time Close Mortgages: VA, FHA, And USDA Part Two

In our last blog post, we discussed how VA, USDA, and FHA One-Time Close mortgage loans differ. USDA One-Time Close construction loans have income limits and restrictions on certain property types, VA loans are similar to the FHA version except they are restriction to military members who have served a minimum amount of time in uniform (and certain qualifying military spouses). But what does the FHA One-Time Close construction loan have to offer? For starters, the FHA One-Time Close (OTC) loan is available to any financially qualified borrower who wants to build and buy a primary residence in an approved configuration. FHA loan rules require the home to be owner/occupied, not used as an investment property, and the home must conform to both FHA minimum standards once completed and the | more...

 
One-Time Close Mortgages: The Differences Between VA, FHA, And USDA

One-Time Close Mortgages: The Differences Between VA, FHA, And USDA

There are several different kinds of loan options you can explore if you want a home built for you instead of purchasing an existing-construction house. The type of home loan known as an FHA One-Time Close construction loan is available to provide a single loan application and closing date for your mortgage. The VA One-Time Close loan and USDA One-Time Close construction loan have similar features but these three types of construction loan do not have identical features and they are not appropriate for all borrowers. Of the three, FHA One-Time Close loans (known as FHA OTC loans) offers construction loan options to a wider range of applicants. Why? USDA One-Time Close Construction Loans USDA One-Time Close loans allow financially qualified borrowers to apply for a single loan to build | more...

 
FHA Home Loans And Occupancy: What You Can And Cannot Do

FHA Home Loans And Occupancy: What You Can And Cannot Do

If you are buying an existing construction home with an FHA mortgage, or having one built for you using an FHA One-Time Close construction loan, you will notice some common requirements for these mortgages; one such requirement involves the borrower’s use of the property once the loan has closed. FHA new purchase mortgages, also known as forward mortgages, are intended for those who wish to occupy the home as their main address, or “primary residence”. Some borrowers may be confused by this requirement because they assume you can buy and rent out a home using an FHA mortgage without intending to occupy it. But the reality is that FHA mortgages actually require occupancy by at least one person obligated on the home loan, so how is it possible to purchase | more...

 
FHA One-Time Close Construction Mortgages For Dream Homes Part Two

One-Time Close FHA VA USDA Construction to Permanent Financing

There is a type of home loan borrowers can apply for when they want a house built for them from the ground up. These mortgages are known as One-Time Close loans and are offered by the VA, USDA, and FHA programs via a participating lender. Do you prefer to have a home built just for you rather than purchasing someone else’s property? What Are FHA Construction Loans? The FHA construction loan known as a One-Time Close (OTC) mortgage, like its’ USDA and VA counterparts, offers qualified borrowers a single mortgage for the construction project; traditionally home construction loans featured two applications, two closing dates, and two chances to have a loan application approved or denied. There is one loan for the construction itself (which must be paid for along with | more...

 
FHA One-Time Close Construction Mortgages For Dream Homes Part Two

FHA One-Time Close Construction Mortgages For Dream Homes Part Two

Why choose to build a home instead of buying an existing construction property with an FHA mortgage? Some borrowers simply don’t want the hassle of house hunting or can’t find the right existing property. In cases where an FHA borrower wants a home built for them, the FHA One-Time Close construction loan (OTC) can be a major help. In a previous blog post, we started discussing why borrowers should choose an FHA construction loan over a conventional one. There are plenty of reasons including these: Lower Down Payments As with interest rates, FICO scores and other credit qualifications will play an important role in the down payment requirement you are given with FHA OTC mortgages. In general borrowers should expect to make a minimum down payment of 3.5%, but borrowers | more...

 
Build Your Dream Home: FHA One-Time Close Construction Mortgages

Build Your Dream Home: FHA One-Time Close Construction Mortgages

FHA One-Time Close construction loans, also known as construction-to-permanent mortgages, are a way that borrowers who need a lower down payment and more flexible loan approval guidelines can apply for a home loan that allows the property to be built from scratch. One-Time Close loans, which are sometimes referred to as FHA OTC mortgages, require the borrower to qualify only once for both the construction portion and the mortgage loan. This type of FHA mortgage may vary more among participating lenders because of certain features of the loan including the type of property that can be built, and the loan approval process as it relates to getting construction permits for the project. Some Options Are Available With Some Lenders But Not Others: Shop Around! Your participating lender may not offer | more...

 
Protect Yourself When Shopping For A New Home

Protect Yourself When Shopping For A New Home

A recently published report about home loans and credit checks advises, “Do not allow a credit pull by a lender you don’t know, especially if the offer is unsolicited”. This advice leads to a few other questions about the home loan process; how do you protect yourself against identity theft, fraud, scams, and unscrupulous vendors when you are trying to buy a home with an FHA mortgage? Consider Your Recent Activities When Shopping For A Home Loan What does this mean? When you want to buy a home with an FHA mortgage or any other kind of loan, consider that you may be signing up for accounts on real estate sites or other online resources and that you don’t always know what might become of your personal data with third | more...

 
FHA One-Time Close Construction Loans In 2019

FHA One-Time Close Construction Loans In 2019

Why should borrowers consider applying for an FHA One-Time Close (OTC) Construction Loan to build a home in 2019? There are several reasons why having a home built for you from the ground up rather than purchasing an existing construction property might be appealing. FHA One-Time Close mortgages are construction loans that have a single application and closing date; they require the use of escrow and the borrower can either purchase land to build on or use the land already owned. What are the motivations for using an FHA OTC? FHA One-Time Close Construction Loans have lower down payment guidelines, equity in the land owned could be used toward the FHA down payment requirement where applicable, and the borrower makes no mortgage payments during the construction phase of the loan. | more...

 
FHA Home Loan Rules For New Construction Appraisals

FHA Home Loan Rules For New Construction Appraisals

Borrowers who are interested in having a home built for them from the ground up using an FHA construction loan such as an FHA One-Time Close mortgage or any other type of FHA-guaranteed mortgage loan may wonder what the rules are for appraisals. After all, existing construction appraisal processes are for a home that is ready to sell (although the process may vary if the borrower is applying for certain types of rehab loans). While the appraisal requirements may be generally the same-the home must be safe, habitable, and have an economic life for the entire duration of the mortgage-there are procedural issues that affect new construction properties. With that in mind, appraisals on new construction run a bit differently in some procedural ways than existing construction mortgages; with the | more...