The FHA One-Time Close Loan is a secure, government-backed mortgage program available for one-unit, stick-built primary residences, new manufactured housing for primary residences (excludes single wide mobile homes), and modular homes. It allows borrowers to finance for the construction, lot purchase (if necessary), and permanent loan into a single mortgage. It provides for a single all-at-once closing with a minimum down payment of 3.5 percent (up to your FHA county lending limit). 

What is a Single Close Construction Loan?

With a single close construction loan, you can finance both the construction of your new home and the long-term mortgage that will be needed to afford your home once it’s built. This streamlines the process, allowing you to close on your home loan once, rather than having to secure two or more separate loans for the property, construction, and home financing. You qualify once and have a single appraisal, loan originator, and closing process. This reduces the time it takes to build and move into your new home, protects you from unforeseen circumstances down the road, and saves you from paying double the closing costs.

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How Single Close Construction Loans Work

Qualifying for a one-time close construction loan is no more complicated than qualifying for a conventional home loan, depending on your overall financial health and risk level. Please contact our office for more details and Pre-qualification. To get you started, we’ve outlined the steps needed and loan programs available to help you understand the process.

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The Financing Process

Get in touch with us to see if we can start the process to finance the construction of your new home.

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1. Choose a builder: Find a reputable builder in your area who meets eligibility requirements for financing, including 3 years minimum experience building residential homes, a minimum of $1 million per year in volume, and that their primary business is building residential homes.

2. Prepare a contract: We’ll work with you as you prepare a contract with your builder to determine if the home is within your budget and what the cost and timeline will be to build your home and finance it.

3. Begin the loan process: Once you review and sign the contract, it will be evaluated by our construction underwriting team. Signing the contract and providing needed documentation usually take only a few days.

4. Underwrite the loan: Our underwriting team will evaluate and potentially approve the loan for the construction process, as well as the permanent portion of the loan in one single step.

5. Close the loan: With a final review of all the financial information you submitted, including documentation of current income and financial liabilities, you can sign the paperwork to close on your loan and secure financing. 

6. Begin construction: You’ll begin construction on your new home within 30 days of the closing date. Your construction team will provide you with regular updates on the progress of your home. We’ll manage the construction phase, including ordering draw inspections and any state-required surveys and inspections.