Articles in Category: Special FHA Programs

December 27, 2018

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

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...

FHA One-Time Close Construction Mortgage Basics

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 15, 2018

HUD Announces Disaster Relief For Hurricane Michael Victims In Florida

By Bruce Reichstein

The Department of Housing and Urban Development has announced disaster relief for victims of Hurricane Michael in Florida. According to a HUD press release, the government will “speed federal disaster assistance to the State of Florida and provide support to homeowners and low-income renters forced from their homes due to Hurricane Michael” following a presidential declaration of a major disaster area in several Florida counties including Bay, Franklin, Gulf, Taylor, and Wakulla. The declaration means those living in the affected areas are eligible for a 90-day moratorium on foreclosure on FHA mortgages. To get the benefit of this moratorium borrowers should call their loan officers and contact the FHA Resource Center at 1-800-304-9320. Never assume it is safe to simply stop making payments on an FHA mortgage after a natural | more...

October 11, 2018

FHA Loan Rules For Presidentially-Declared Major Disaster Areas

By Bruce Reichstein

In September of 2018, the FHA and HUD issued a reminder to lenders and FHA loan servicers regarding official policy for dealing with loans in presidentially-declared major disaster areas. A document labelled FHA INFO #18-40 states that for both forward loans and FHA reverse mortgage loans, certain guidance applies once the federal disaster area declaration has been made. The guidance begins with a definition of the disaster area declaration, explaining that it is made when “natural or other events are of such severity that it is beyond the combined capabilities of state and local governments to respond”. When this is invoked by the president, FHA loan guidance to participating lenders includes the following: FHA Loan Foreclosure Moratorium FHA loan rules include a 90-day moratorium on foreclosures following the declaration of | 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...