OTC Loans | One-Time Construction Loans for Building Your Dream Home
Explore One-Time Construction Loans for Building Your Dream Home
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home construction loans
one-time close loans
FHA OTC loan
VA OTC loans
USDA OTC loan
construction financing
single close loans
maryland Realtor
Considering Building Your Own Home?
Explore One-Time Construction (OTC) Loans!
Are you thinking about building your dream home and considering taking out separate loans for the land, construction, and the home itself? There are more cost-effective alternatives to the expensive Conventional Construction-to-Perm loans. The Federal Housing Administration (FHA), the U.S. Department of Veterans Affairs (VA), and the United States Department of Agriculture (USDA) offer One-Time Construction (OTC) Loans that can save you both time and money.
All homes built and purchased with an OTC loan must serve as the borrower's primary residence.
Here’s a breakdown of each loan type, and some recommended lenders to get you started. If you need help finding a lender or a Realtor, feel free to contact me. If you’re a lender or Realtor interested in joining my referral network, email me!
FHA One-Time Close (OTC) Loan
The FHA OTC Loan is an excellent option for those looking to build a new single-family home. This loan allows you to combine the financing for the lot and the construction into a single loan with as little as 3.5% down.
Loan Features:
Down Payment: Minimum 3.5% down payment
Term: Typically a 30-year fixed mortgage
Credit Score: Minimum FICO score of 640
Benefits:
Single Closing: Saves time and money with only one closing process.
Low Down Payment: Start building with as little as 3.5% down.
Fixed Interest Rates: Interest rates remain fixed throughout the construction process.
No Payments During Construction: No payments required during the construction phase.
No Re-Qualifying: No need to re-qualify after construction is completed.
These benefits make the FHA OTC Loan a popular choice for many individuals and families building their own homes!
VA One-Time Close (OTC) Loan
The VA OTC Loan combines the construction and land financing into one loan, perfect for eligible veterans or active duty military personnel.
Loan Features:
Down Payment: No money down (100% loan-to-value ratio)
Term: 30-year fixed-rate mortgage
Credit Score: Minimum FICO score of 640
Contractor Requirements: Contractor must be registered with the VA
Benefits:
Single Closing: Only pay closing costs once.
No Down Payment: 100% financing available.
Fixed Interest Rates: Locked-in interest rates throughout the construction process.
Military Exclusive: Tailored for those with military ties.
This loan program provides significant advantages for military families looking to build their new home.
USDA One-Time Close (OTC) Loan
For those building in rural areas, the USDA Single Close Construction Loan is a great option. This loan covers the financing for the lot and construction with no money down.
Loan Features:
Location: Must be in an eligible rural area
Term: 30-year fixed mortgage
Credit Score: Minimum FICO score of 640
Contractor Requirements: Must be approved by the USDA, with appropriate licenses and insurance
Benefits:
Single Closing: One closing process to save on costs.
No Down Payment: 100% financing with no money down.
No Payments During Construction: Payments start after the construction is completed.
Rural Focus: Tailored for those in rural areas.
No Re-Qualifying: No need to re-qualify after construction.
The USDA OTC Loan is ideal for individuals in rural areas looking to finance a new construction project.
Getting Started
If you're ready to explore these loan options or need assistance finding a lender or Realtor, contact me. And if you're a lender or Realtor interested in joining my referral network, please email me. Let's make your dream home a reality with the right loan for your needs!
Feel free to reach out for more personalized assistance and to get started on your home-building journey today!