USDA One-Time Close Construction Loan: Build Your Home with No Money Down
What is a USDA One-Time Close Construction Loan?
The USDA One-Time Close (OTC) Construction Loan is a unique mortgage designed to help low- to moderate-income homebuyers build a home in a USDA-eligible rural area—with no down payment required. Unlike traditional construction loans, which require multiple loans and closings, the USDA OTC combines construction and permanent financing into a single loan.
This means you only go through one approval process, one closing, and one set of closing costs—simplifying the homebuilding process!
Benefits of a USDA OTC Construction Loan
✅ No Down Payment – 100% financing for eligible borrowers
✅ One Loan, One Closing – Saves time and money
✅ Low Fixed Interest Rates – Competitive mortgage rates with no surprises
✅ Designed for Rural Homebuyers – Available for homes built in USDA-eligible areas
✅ No Need for Requalification – No second loan approval after construction
How Does the USDA OTC Loan Process Work?
The USDA OTC Loan follows a step-by-step process to ensure a smooth home-building experience:
1️⃣ Prequalification & Loan Approval – Borrowers apply and verify income, credit, and eligibility.
2️⃣ Find a Builder & Home Plans – Choose a USDA-approved builder and finalize home plans.
3️⃣ Loan Closing & Construction Begins – The loan closes before construction starts, covering both land purchase (if needed) and building costs.
4️⃣ Construction Phase (Up to 12 Months) – Payments are made to the builder in stages, with regular inspections.
5️⃣ Completion & Move-In – Once construction is complete, the loan automatically converts into a 30-year fixed mortgage.
Common FAQs About USDA OTC Loans
📌 Who is eligible?
USDA loans are for low- to moderate-income homebuyers looking to build in USDA-eligible rural areas.
📌 What credit score is needed?
Most lenders require a 640+ credit score, though some allow lower scores with compensating factors.
📌 Can I buy land with a USDA OTC Loan?
Yes! If you don’t already own land, the loan can finance the purchase as part of your one-time closing.
📌 Do I need a construction loan first?
No! Unlike traditional construction loans, the USDA OTC is a single loan—meaning no second approval or refinancing.
Final Thoughts
If you’re looking to build a home in a USDA-eligible area, the USDA One-Time Close Construction Loan is a fantastic way to do it without a down payment. Contact us today to learn if you qualify and take the first step toward building your dream home!
FHA One-Time Close Construction Loan: Build Your Home with a Low Down Payment
What is an FHA One-Time Close Construction Loan?
The FHA One-Time Close (OTC) Construction Loan allows first-time homebuyers and those with lower credit scores to build a brand-new home with a low 3.5% down payment. Unlike traditional construction financing, this program bundles the construction and permanent mortgage into a single FHA loan.
That means one loan approval, one closing, and one set of fees—making it easier and more affordable to build your dream home.
Why Choose an FHA OTC Construction Loan?
✔ Low Down Payment – Only 3.5% down for eligible borrowers
✔ Easier Credit Qualification – Lower credit score requirements than conventional construction loans
✔ One-Time Closing – Avoids multiple loans and extra closing costs
✔ Fixed Interest Rate – Your interest rate is locked in before construction starts
✔ Flexible Property Options – Allows for single-family homes, modular homes, and manufactured homes
How the FHA One-Time Close Loan Works
Here’s how the FHA OTC loan simplifies the home-building process:
1️⃣ Loan Pre-Approval – Get approved based on credit, income, and FHA guidelines.
2️⃣ Find a Builder & Choose a Home Plan – Work with an FHA-approved builder and finalize your home design.
3️⃣ Loan Closing – Your FHA loan is finalized before construction begins.
4️⃣ Construction Begins (6-12 Months) – Funds are disbursed in phases to pay the builder.
5️⃣ Move-In & Final Loan Conversion – The loan automatically converts into a 30-year fixed mortgage after construction.
FHA OTC Loan FAQs
📌 Who qualifies for this loan?
FHA loans are ideal for first-time buyers and those with lower credit scores.
📌 What credit score is needed?
A minimum 580 credit score is required to qualify for 3.5% down.
📌 Can I buy land with an FHA OTC Loan?
Yes! The loan covers both the land purchase and construction.
📌 Do I need a second loan after construction?
No! Unlike traditional construction loans, the FHA OTC eliminates the need for refinancing.
Start Building with an FHA OTC Loan Today!
If you’re ready to build your dream home but don’t have a large down payment, an FHA One-Time Close Construction Loan is the perfect solution. Contact us today to learn more and get started!
VA One-Time Close Construction Loan: Build Your Home with Zero Down
What is a VA One-Time Close Construction Loan?
The VA One-Time Close (OTC) Construction Loan is an exclusive benefit for veterans, active-duty service members, and eligible spouses, allowing them to build a new home with zero down payment. This loan program eliminates the need for separate construction financing and simplifies the process into a single VA mortgage.
With no PMI, no down payment, and competitive rates, this is one of the best construction financing options available for those who have served.
Advantages of a VA OTC Loan
🟢 No Down Payment – 100% financing with no cash required upfront
🟢 No PMI – Save money with no private mortgage insurance
🟢 One-Time Closing – No need for a second loan after construction
🟢 Low Fixed Rates – VA loans offer some of the lowest interest rates available
🟢 Government-Backed Security – Backed by the Department of Veterans Affairs
How the VA OTC Loan Works
The process is simple and stress-free:
1️⃣ Loan Pre-Approval – Verify VA eligibility and get pre-approved.
2️⃣ Select a VA-Approved Builder – Choose a builder who meets VA requirements.
3️⃣ Loan Closing & Construction Begins – The VA OTC loan closes before construction starts.
4️⃣ Construction Period (6-12 Months) – Payments are made to the builder as work is completed.
5️⃣ Move In & Loan Converts – When construction is done, the loan automatically becomes a 30-year VA mortgage.
FAQs About VA OTC Loans
📌 Who qualifies for a VA OTC loan?
Eligible veterans, active-duty military, and surviving spouses.
📌 What credit score is needed?
A 620+ credit score is recommended for VA construction loans.
📌 Can I build any type of home?
The VA loan is designed for single-family homes built by VA-approved builders.
Start Building with a VA OTC Loan Today!
If you’re a veteran or active service member, the VA One-Time Close Construction Loan lets you build your dream home with zero down. Contact us today to get started!
