One-Time Close Construction Loan
One-Time Close Construction Loans simplify homebuilding by combining construction financing and your mortgage into one loan, one closing, one process, one dream home built from the ground up.
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Are you looking for the easiest way to build your dream home? The One-Time Close Construction Loan has made that a reality. This creative financing tool enables a simple, one-stop transaction that transforms short-term construction financing into permanent mortgage financing. No more worrying about successive closings, this is a clear winner option for both conventional and VA construction loan borrowers alike.
Boosting project success rates through simplification, this loan allows homebuyers, builders, and contractors to complete projects with greater professionalism and cost-effectiveness.
One-Time Close Construction Loans Near You
Security America Mortgage works with borrowers and approved builders nationwide (availability varies by state and loan program). Whether you are building in a rural area, suburban community, or a growing metro market, a One-Time Close Construction Loan can simplify the process with one approval and one closing.
One-Time Close Pros and Cons
Is a single-close loan right for you? Below are the key advantages and drawbacks of one-time close construction loan programs.
Pros
- Finances both the construction and the home purchase with one loan
- Lower overall closing costs
- Interest rate locked in upfront
- No need for multiple loans or repeated qualification
- More accessible options for less-qualified buyers, helping make home construction achievable across a range of budgets
Cons
- Interest rates may be higher than other loan types
- Less flexibility and fewer negotiation options
- Fewer lenders offer these programs
What Are the Characteristics of One-Time Close Loans?
One-Time Close loans are designed specifically to simplify the homebuilding process. They eliminate the need for separate approvals and closings by combining construction and permanent financing into one transaction. Borrowers qualify once, saving time, money, and stress. Loan funds are released according to a defined draw schedule tied to construction milestones.
Forward funding enables builders to construct homes without uncertainty, since financing is secured upfront and funds are distributed as work progresses.
Key Features of the Program
- Single Closing – One transaction for construction and permanent mortgage financing
- Draw Funding – Initial funds are released to start construction, followed by scheduled draws
- Flexible Financing Options – Available for purchases or refinances
- Flexible Construction Terms – Typically 1 to 11 months, with exceptions for modular homes if approved
The Simplicity of Fewer Approvals
With a thorough contractor and project approval process handled by an experienced VA construction loan lender, builders are vetted extensively. This includes license verification, insurance, references, and signed contracts. Contractor approval typically takes 3–5 business days and includes a contract review fee.
VA loans require additional builder documentation, including a VA Builder ID, ensuring compliance and a smoother approval process.
Project approval requires detailed plans, cost breakdowns, permits, and appraisals to keep construction on track.
Risk Management and Insurance
One-Time Close Construction Loans require a Builders’ Risk insurance policy, which protects the property during construction. For VA loans, this cost is included in the builder’s budget. Borrowers must also provide a homeowner’s insurance quote for coverage once construction is complete.
Building Your Dream Home
Whether you are purchasing land, refinancing an existing lot, or building on property you already own, the One-Time Close Construction Loan helps make your dream home a reality. Supported by experienced construction loan specialists, this program guides you from start to finish with confidence.
Ready to build your home with a One-Time Close Construction Loan? Take advantage of the simplicity, flexibility, and long-term security this financing offers.
What Is a 30-Year Construction-to-Permanent Loan?
A construction-to-permanent loan, also called a single-close loan, combines construction financing and the long-term mortgage into one loan. This eliminates the need for separate financing phases, reducing costs and complexity.
Benefits of a One-Time Close Loan
This loan provides a streamlined and efficient way to finance a custom-built home. Borrowers qualify once, builders are paid on schedule, and construction proceeds without financing delays.
Borrowers avoid requalification, duplicate closing costs, and the risk of interest rate changes after construction. During construction, payments are typically interest-only, helping keep monthly expenses manageable.
Talk With a Construction Loan Specialist
Planning to build in 2025? A One-Time Close Construction Loan can finance land, construction, and your permanent mortgage with one approval and one closing.
What Are the Types of One-Time Close Construction Loans?
The most common One-Time Close loan programs include:
What Is an FHA One-Time Close Construction Loan?
FHA One-Time Close loans are ideal for borrowers with limited down payment funds or lower credit scores. Backed by the Federal Housing Administration, these loans offer:
- Minimum 3.5% down payment
- Flexible credit requirements
- One loan, one approval, one closing
- Mortgage insurance for the life of the loan
What Is a USDA One-Time Close Construction Loan?
USDA One-Time Close Construction Loans are designed for borrowers building in eligible rural areas. Key features include:
- Zero down payment for eligible borrowers
- Competitive interest rates
- Income limits apply
- Rural location requirements
What Is a VA One-Time Close Construction Loan?
VA One-Time Close Construction Loans are available to eligible veterans, active-duty service members, and certain surviving spouses. Benefits include:
- 0% down payment
- No private mortgage insurance
- VA-approved builder requirement
- Builders’ Risk insurance is included in construction costs
What Is a Conventional One-Time Close Construction Loan?
A Conventional One-Time Close Construction Loan finances both construction and the permanent mortgage in one loan. Once construction is complete, the loan automatically converts to a standard 15- or 30-year mortgage without requalification.
This option is best for borrowers with strong credit and larger down payments and is not government-backed.
How Does a One-Time Close Construction Loan Work?
- Application and Approval – Borrowers qualify for both construction and permanent financing.
- Single Closing – The loan closes before construction begins.
- Construction Phase – Funds are released in stages after inspections.
- Loan Conversion – After completion and occupancy, the loan converts automatically to a permanent mortgage.
No second closing and no requalification are required.
One-Time Close Loan Requirements
Borrower requirements vary by program and may include credit score minimums, down payment guidelines, debt-to-income limits, and stable income.
Builder and project requirements include an approved licensed builder, detailed plans and specifications, and owner-occupancy for government-backed programs.
Is a One-Time Close Loan Still Worth It in 2025?
Yes. In 2025, One-Time Close Construction Loans will remain one of the most secure and efficient ways to build a custom home.
Borrowers benefit from locking in their permanent interest rate before construction begins, avoiding duplicate closing costs, and eliminating the risk of losing financing after construction.
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Start Your One-Time Close Construction Loan
If you’re ready to build, Security America Mortgage can help you finance your land, construction, and permanent mortgage with one simple loan.
One loan.
One closing.
Construction-to-permanent financing.