Articles in Category: FHA One-Time Close

May 20, 2019

FHA One-Time Close Construction Mortgage Basics

FHA home loan options are not limited to existing construction housing. FHA borrowers, including first-time home buyers, have the option to apply for a FHA One-Time Close Construction loan. This allows any borrower who financially qualifies to have a home built for them from the ground up. FHA One-Time Close loans have some basic requirements; some of these are FHA loan program rules, but others are unique to an individual lender. For example, FHA One-Time Close mortgages, also known as FHA OTC loans, technically allow a borrower to build a home with more than one unit. But many lenders may restrict these mortgages to single-unit properties. Or they may not permit the financing of certain closing costs, require higher FICO scores, etc. Much depends on the rules of the specific | more...

December 27, 2018

FHA One-Time Close Construction Loans: Advice For First-Time Home Buyers

By Bruce Reichstein

First-time home buyers aren’t always looking for a pre-existing home. Some want to have a house built to suit according to design plans they have personally approved. The FHA One-Time Close construction loan is an excellent option for those who want to build a home instead of having to scour the housing market for just the right property. It’s good to explore FHA mortgage loan options in this area by asking a participating lender about the FHA One-Time Close (OTC) construction loan which allows a single loan application and a single closing date instead of the more traditional construction loan which features two loan applications and closing dates. One closing date is for the construction phase and there is also a second loan and closing date for the mortgage itself. | more...

December 21, 2018

Higher FHA Loan Limits For One-Time Close Construction Loans In 2019

By Joe Wallace

The FHA and HUD have announced higher FHA loan limits in most counties for 2019. A small handful (under 200) counties in the entire country will not see higher loan limits, but the rest of the nation will see a higher FHA loan guaranty limit for single family, owner-occupied homes with between one and four units. What does this mean for borrowers interested in an FHA One-Time Close Construction loan in 2019? If you need a home built for you from the ground up instead of buying an existing construction home, the FHA One-One Time Close program is for you. FHA One-Time Close Mortgages Are Different Than Other FHA Mortgages Lender requirements for FHA One-Time Close loans can be more strict than for existing construction loans. Higher FICO scores may | more...

November 26, 2018

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

By Joe Wallace

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...

November 26, 2018

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

By Bruce Reichstein

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...

November 20, 2018

One-Time Close FHA VA USDA Construction to Permanent Financing

By Bruce Reichstein

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...

November 12, 2018

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

By Bruce Reichstein

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...

November 12, 2018

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

By Joe Wallace

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...

October 9, 2018

FHA One-Time Close Construction Loans

By Bruce Reichstein

Why should borrowers consider applying for an FHA One-Time Close (OTC) Construction Loan to build a home? 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. There are | more...

May 28, 2018

Happy Memorial Day 2018!

By Bruce Reichstein

Happy Memorial Day! We pause today from our usual posts about FHA home loans, refinance loans, FHA One-Time Close construction loans and related topics to recognize the sacrifices made by our women and men in uniform. Thank you to all who have served-from those who have gone before to those who are about to enter their first year in uniform in service to our country. We return with our regularly scheduled posts on Tuesday. Thank you for reading, and have a safe and happy Memorial Day 2018. We are glad you stopped by!