One Time Close Construction Loans
One Time Close Construction Loans
Principle Home Mortgage offers ‘One-Time Close’ construction loans for FHA, USDA, and VA loan types in State College, PA and the Centre County region. ‘One-Time Close’ mortgage loans are used to finance both the land and construction of a home, whether it’s a 1-unit stick-built, doublewide manufactured home, or modular home. When considering a new build, there are many advantages to this mortgage program. Before construction even begins, the permanent portion of the loan is underwritten and approved, as well as the construction portion of the loan all as one. Once this process is done, closing will be coordinated, and construction may begin. If you’re interested in building your dream home, contact Principle Home Mortgage for more information on a ‘One-Time Close’ mortgage program.
- Terms: 15 Year Fixed or 30 Year Fixed; USDA = 30 Year Fixed Only
- Agency: Federal Housing Administration; The Department of Veterans Affairs; US Department of Agriculture/Rural Housing Authority
- Max Loan-to-Value: FHA = 96.5%; VA or USDA = 100%
- Max Loan Amount: No guideline is set, but based upon your debt-to-income (DTI) ratio and several other factors. FHA will follow loan limit maximums set by the agency.
- Mortgage Insurance: Depending on the loan type, this varies and follows the guidelines of other loan products from the various agencies.
- Upfront Mortgage Insurance: Depending on the loan type, this varies and follows the guidelines of other loan products from the various agencies.
- Max Income: Depending on the loan type, this varies and follows the guidelines of other loan products from the various agencies.
- DTI Requirement: Depending on the loan type, this varies and follows the guidelines of other loan products from the various agencies.
- Credit Requirement: 620 lowest middle score from Transunion, Equifax, or Experian.
- Down Payment Requirement: As little as 0% for VA and USDA; 3.5% for FHA
- The agencies back your mortgage: All the loan types available are federally-back mortgages. This backing is extended to the private lender in the case of foreclosure, allowing the lender to recover most or all of their investment, resulting in less risk to the lender. For the borrower, this can increase the likelihood of obtaining the loan under better terms than other loan programs.
- Flexible property types: Your dream home can be reality with the ease of a ‘One-Time Close’ mortgage loan. This product will allow for new multi-wide manufactured housing, modular housing, or 1-unit stick-built housing. Specialty or niche housing is not allowed. (Ex: Log Home, Tiny House)
- No payment is due until construction is complete: While the permanent and construction portions of this loan product actually close before construction begins, you do not pay any mortgage payments until construction is complete.
- Single construction fee: This fee covers the construction interest, construction draws, title updates, any necessary loan modifications, construction underwriting, and construction closing coordination.
- Single closing reduces total costs: Generally with a construction loan, there are 2 closings with the borrower having to be re-qualified for the mortgage prior to the second closing. With the ‘One-Time Close’ mortgage product, there is no re-qualification, no second closing, thus a cost savings to the borrower!
HOW DO I APPLY?
‘One-Time Close’ mortgages follow their respective agency guidelines so at a minimum you will need 2 years tax returns and W2s, 2 months bank statements, 2 forms of ID, and 30 days of paystubs. If you are self-employed, these requirements may vary slightly. If you are applying for a VA loan, a Certificate of Eligibility will be required. If you want to build in State College, PA and the Centre County region, reach out to Principle Home Mortgage at (814) 308-0959 to discuss your home financing needs.