One Time Close Construction Mortgage Loan Programs
One-time close construction mortgages are a type of loan that combines the financing for the land purchase, the construction of the home, and the final mortgage into one closing process. This type of loan can simplify the construction and financing process for homeowners, as they only need to apply for one loan and only have to pay one set of closing costs.
One Time Close Mortgage Loan Highlights
- Qualification Requirements: The qualifications for a one-time close construction mortgage may vary depending on the type of loan. However, homeowners can expect to need a higher credit score and a larger down payment than with a traditional mortgage. Lenders may also require borrowers to have a detailed construction plan, as well as a qualified builder.
- Down Payment Requirements: The down payment requirements for a one-time close construction mortgage can also vary. For example, a conventional one-time close loan may require a down payment of 10-20%, while an FHA loan may require a down payment of 3.5%. VA and USDA loans may offer 100% financing, meaning no down payment is required. Jumbo loans typically have stricter requirements, and may require a larger down payment.
- Interest Rates: Interest rates for one-time close construction mortgages are typically higher than traditional mortgage rates. However, rates may vary depending on the type of loan and the lender.
- Construction Process: With a one-time close construction mortgage, the construction process will typically start after the loan is approved and closed. The construction process can take several months or longer, depending on the size and complexity of the home.
- Options for FHA, Conventional, VA, USDA, and Jumbo Loans: Homeowners can choose from several types of one-time close construction mortgages, including FHA, Conventional, VA, USDA, and Jumbo loans.
Types of One Time Close Construction Loans:
- FHA One-Time Close Construction Loans: These loans are insured by the Federal Housing Administration and are a popular choice for first-time homebuyers. FHA loans have more lenient credit and down payment requirements than conventional loans.
- Conventional One-Time Close Construction Loans: These loans are not insured by the government and typically require a larger down payment and higher credit score than FHA loans. Conventional loans may be a good choice for homeowners who have a higher credit score and a larger down payment.
- VA One-Time Close Construction Loans: These loans are offered by the Department of Veterans Affairs and are available to eligible veterans, active-duty military, and surviving spouses. VA loans offer competitive interest rates and no down payment is required.
- USDA One-Time Close Construction Loans: These loans are offered by the United States Department of Agriculture and are available to borrowers in eligible rural areas. USDA loans offer 100% financing and competitive interest rates.
- Jumbo One-Time Close Construction Loans: These loans are for higher-priced homes and may require a larger down payment and higher credit score than other types of one-time close construction loans.
In summary, one-time close construction mortgages can simplify the financing process for homeowners who are building a new home. It is important to understand the qualification requirements, down payment requirements, interest rates, and construction process before applying for a loan. Homeowners can choose from several types of one-time close construction loans, including FHA, Conventional, VA, USDA, and Jumbo loans, depending on their specific needs and circumstances.
Conventional Loan Program Terms:
- Up to 97% LTV For First Time Buyers
- Up to 95% LTV Refinance
- 620 Min FICO
- $75,000 Min Loan Amount
- Up to $726,200 Loan Amount 1 Unit
- 1-4 Units, Condos, PUDS & Manufactured Homes Eligible
- Up to 50% DTI