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One-Time Close Loan

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What is the VA, FHA and USDA One-Time Close Loan?

image These government One-Time Close (OTC) loans are products that allow borrowers to combine financing for a lot purchase, construction and permanent mortgage into one first mortgage loan. Ideally suited for borrowers who are purchasing new construction, These government OTC loans offer the benefits of low money down financing, competitive interest rates and one closing for all financing.



Government Loans One-Time Close Loan – The Basics

  • Designed to simplify the financing process for new home buyers, eliminating the need to obtain both a construction loan and permanent mortgage

  • Insured by Government Loans, which keep interest rates low

  • For Construction-to-Permanent, closing occurs before construction begins

  • 96.5% Maximum LTV-FHA; 100% Maximum LTV-VA and USDA

  • No payments due during the construction phase

  • Closing costs may be financed

  • 15 and 30 year fixed rates available

  • No re-qualification once construction is complete

  • A single closing reduces closing costs, saving your borrowers money



Who is eligible for the Government One-Time Close Loans?

These OTC loan products are available to borrowers who meets the minimum qualifying criteria. This includes first time and repeat buyers. Here are the basic requirements for these OTC loan approvals:

  • Borrower must have contracted with a builder (must be licensed general contractor)

  • Borrower must be purchasing the land at closing, or currently own their property

  • At closing, after funds are disbursed to cover the purchase of the land, the balance of the mortgage proceeds must be placed in an escrow account to be disbursed as construction progresses

  • Amortization of the permanent mortgage must begin no later than the first of the month following 60 days from the date of the final inspection or issuance of the Certificate of Occupancy

  • Maximum loan amounts will vary by location

  • Minimum FICO of 620


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