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Whether you are looking to purchase a home or upgrade the one you have, it all starts with choosing the right lender and the right home loan.
One-Time Close Construction Loan
Welcome to One-Time Close Construction (OTC) loans, your answer to building and financing your home. Fund your home construction and get a mortgage in the same loan. With an OTC loan, you can build the home you want from the ground up.
What is a One-Time Close Construction Loan?
A One-Time Close Construction loan is a financing option that allows borrowers to buy land and build a new home under a single loan, combining construction and permanent mortgage financing. This loan simplifies the home-building process by getting rid of multiple loan applications and closing costs. OTC loans are available in various forms, including Conventional, VA, and FHA.
Flexible Credit Requirements
FHA and VA OTC loans have flexible credit score requirements.
Flexible Down Payment Options
FHA and VA OTC loans have flexible down payment options.
Interest-Only Payments
OTC loans offer interest-only payments during construction.
Your Home, Your Way
Build the home you want from the ground up.
How to Apply for Your Home Loan
Follow some simple steps to prepare to apply for a One-Time Close Construction loan online today
Check Your Eligibility
You will need to meet the credit and income requirements for the loan type you want ie. Conventional, FHA, or VA.
Choose a Builder
You will need to choose a reliable and lender-verified builder to build your home.
Prepare for Your Application
You will need to gather a variety of documents for an OTC loan including, project details, building plans, and income and debt information.
Ready to Start Your Application?
If you think a One-Time Close Construction loan may be right for your needs, apply today. Or, if you have questions about this, or any of our loan types, talk to one of our loan officers. They’ll be happy to help you on your journey to homeownership.
Ask about your loan options
Licensed in all 50 States + Washington D.C. and Puerto Rico
Easy online application process and borrower portal
Everything About One-Time Close Construction Loans
Find out all the details about OTC loans. Learn about requirements,
benefits, and different loan types and decide if an OTC loan might be right for you.
Frequently Asked Questions
Answers to some of the most common questions people have about OTC loans.
A One-Time Close Construction loan is a type of financing that combines the costs of land, construction, and permanent mortgage into a single loan with a single closing.
The loan closes before construction starts then payments are issued in stages (draws) as construction progresses. The lender works with an inspector to verify the continuation of the build. Once construction is complete, the loan will change from a construction loan to a permanent mortgage and you will continue making payments on that for the life of the loan.
Benefits of One-Time Close Construction loans include simplified process, lower closing costs, locked-in interest rates, and interest-only payments during construction. They also offer various loan types, which means more flexibility around down payments and credit scores depending on the loan type.
Drawbacks of One-Time Close Construction loans include stricter qualification requirements, higher interest rates, limited flexibility, and potential financial strain.
Yes, many One-Time Close loans allow financing both land purchase and home construction.
Yes, typically interest-only payments are required during construction. Once construction is complete, your loan will change to a traditional mortgage and you will continue making payments on it like normal home loan.
You can build a primary residence, and in some cases, a second home. The type of home you can build with a One-Time Close Construction loan will depend on the loan type, FHA, VA etc.
Typically, the construction phase takes 6 to 12 months, with possible extensions depending on the lender.
Yes, after construction is complete and the loan converts to a standard mortgage.
The requirements for a One-Time Close Construction loan depend on the loan type you are applying for. However, they typically include a down payment of 0%-20%, a minimum credit score of 580-620, and general income verification. You must also provide home plans and specifications for the appraisal and a home inspection will be required upon completion. Property requirements also vary by loan type, however investment properties are ineligible. In many cases, you may also be required to pay mortgage insurance.
Related Articles
Discover valuable information to help you navigate the world of One-Time Close Construction loans. From understanding the basic loan types to their benefits, we cover the most popular topics.
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