USDA One-Time Close Construction

Get Pre-Qualified Today & Shop with Confidence!

USDA OTC Construction

Get Pre-Qualified Today
& Shop with Confidence!

The Lowdown on USDA OTC…

With a USDA One-Time Close Construction Loan, your lender is responsible for managing the disbursement of the loan proceeds to the homebuilder or contractor for costs associated with the home.

Loan costs that are covered by the USDA One-Time Close Construction Loan include:

  • Costs detailed in the contract between the homebuilder and borrower
  • Costs paid to subcontractors for work on the home, including items such as septic, driveways, utilities and landscaping
  • Cost to acquire the land or pay off the balance of the land

Additional costs that may be paid for with your USDA One-Time Close Construction Loan also include items such as surveys, permits, appraisals, inspections, architectural design plans, plan reviews and lender construction administration fees.

The Lowdown on
USDA OTC…

With a USDA One-Time Close Construction Loan, your lender is responsible for managing the disbursement of the loan proceeds to the homebuilder or contractor for costs associated with the home.

Loan costs that are covered by the USDA One-Time Close Construction Loan include:

  • Costs detailed in the contract between the homebuilder and borrower
  • Costs paid to subcontractors for work on the home, including items such as septic, driveways, utilities and landscaping
  • Cost to acquire the land or pay off the balance of the land

Additional costs that may be paid for with your USDA One-Time Close Construction Loan also include items such as surveys, permits, appraisals, inspections, architectural design plans, plan reviews and lender construction administration fees.

What is the USDA One-Time Close Construction Loan?

As its name implies, a Conventional One-Time Close (OTC) is a Construction-to-Permanent loan program that offers all-in-one financing. Available for manufactured, modular, and stick-built homes, OTC loans allow borrowers to finance the construction of a home, lot purchase/land payoff, and permanent mortgage with just one closing.

Designed to simplify the financing process for new home buyers, our One-Time Close Construction Loan Program offering includes Conventional, FHA, VA, and USDA programs.

What is the USDA OTC
Construction Loan?

As its name implies, a Conventional One-Time Close (OTC) is a Construction-to-Permanent loan program that offers all-in-one financing. Available for manufactured, modular, and stick-built homes, OTC loans allow borrowers to finance the construction of a home, lot purchase/land payoff, and permanent mortgage with just one closing.

Designed to simplify the financing process for new home buyers, our One-Time Close Construction Loan Program offering includes Conventional, FHA, VA, and USDA programs.

What is required for a USDA One-time Close Construction Loan?

A Conventional One-time Close Construction Loan is mainly used to finance the building of the borrower’s home and permanent mortgage all into one individual transaction with a single closing. The borrower is going to be approved for a standard Conventional One-time Close Construction Loan if the borrower is already qualified for a long-term permanent conventional mortgage. Upon conclusion of construction, the borrower is going to be expected to convert from the interim construction loan right into a permanent standard fixed-rate loan. There’ll be no other closing or even closing costs required.

What’s required for a USDA OTC Loan?

A Conventional One-time Close Construction Loan is mainly used to finance the building of the borrower’s home and permanent mortgage all into one individual transaction with a single closing. The borrower is going to be approved for a standard Conventional One-time Close Construction Loan if the borrower is already qualified for a long-term permanent conventional mortgage. Upon conclusion of construction, the borrower is going to be expected to convert from the interim construction loan right into a permanent standard fixed-rate loan. There’ll be no other closing or even closing costs required.

What are the benefits of a USDA One-Time Close Construction Loan?

Faster turnaround times, low construction admin fees, and the ability to apply various down payment assistance programs through our loan program are just a few of the ways Valor Home Mortgage can help you achieve your goal of building your dream home.

You only need to qualify once. If the borrower qualifies for long-term financing, they will be eligible for a one-time close construction loan. They don’t have to qualify again for the permanent funding after completion of the home construction.

Reduces the risk for the borrower. Since borrowers don’t have to qualify twice, they significantly reduce the risk of “re-qualifying” again once the house construction has been completed.

Fixed interest rate. The interest rate on a single-close construction loan can be locked a couple of months before the actual completion of the construction. The interest rate during the construction stage is pre-determined and will convert to a pre-determined rate when they close on the loan.

Reduced closing costs. A one-time close construction loan only has one closing, so they don’t have to pay for second closing costs.

Single appraisal requirement. Two-time close transactions require two separate appraisal reports, by two different appraisers, both paid by the borrower. A single-close construction loan only requires one appraisal before closing on the final loan.

Avoid intervening liens. An intervening lien happens when the borrower gets a two-time close loan that does not convert to permanent financing and requires a second closing for the second loan. The recording of the second deed of trust to pay off the construction loan will be present. Typically, this happens when the borrower disputes with the builder about the quality of craft. The final payment is withheld, and the subcontractor doesn’t get paid. In return, the subcontractor files a “mechanics lien,” which is an intervening lien.

What are the
benefits of a
USDA OTC Loan?

Faster turnaround times, low construction admin fees, and the ability to apply various down payment assistance programs through our loan program are just a few of the ways Valor Home Mortgage can help you achieve your goal of building your dream home.

You only need to qualify once. If the borrower qualifies for long-term financing, they will be eligible for a one-time close construction loan. They don’t have to qualify again for the permanent funding after completion of the home construction.

Reduces the risk for the borrower. Since borrowers don’t have to qualify twice, they significantly reduce the risk of “re-qualifying” again once the house construction has been completed.

Fixed interest rate. The interest rate on a single-close construction loan can be locked a couple of months before the actual completion of the construction. The interest rate during the construction stage is pre-determined and will convert to a pre-determined rate when they close on the loan.

Reduced closing costs. A one-time close construction loan only has one closing, so they don’t have to pay for second closing costs.

Single appraisal requirement. Two-time close transactions require two separate appraisal reports, by two different appraisers, both paid by the borrower. A single-close construction loan only requires one appraisal before closing on the final loan.

Avoid intervening liens. An intervening lien happens when the borrower gets a two-time close loan that does not convert to permanent financing and requires a second closing for the second loan. The recording of the second deed of trust to pay off the construction loan will be present. Typically, this happens when the borrower disputes with the builder about the quality of craft. The final payment is withheld, and the subcontractor doesn’t get paid. In return, the subcontractor files a “mechanics lien,” which is an intervening lien.

Who is eligible for USDA One-Time Close Construction Financing?

Loan qualification is the biggest hurdle for most home buyers – but it’s not as intimidating as it looks. Qualifying for a Conventional One-Time Close Construction Loan is no more complicated than qualifying for a conventional home loan. If you’ve ever bought a property, you’re familiar with the steps.

Naturally, not everyone will qualify for a Conventional One-Time Close Construction Loan. Your loan amount will depend on your overall financial health and risk level.

The USDA One-Time Close Construction Loan Process

Here’s how our home loan process works:

  • Complete our simple Conventional One-Time Close Loan Qualifier
  • Receive options based on your unique criteria and scenario
  • Compare mortgage interest rates and terms
  • Choose the mortgage loan offer that best fits your needs
  • Let us connect you with an Elite Realtor to start the process towards building your perfect home

Who is eligible
for USDA OTC
Financing?

Loan qualification is the biggest hurdle for most home buyers – but it’s not as intimidating as it looks. Qualifying for a Conventional One-Time Close Construction Loan is no more complicated than qualifying for a conventional home loan. If you’ve ever bought a property, you’re familiar with the steps.

Naturally, not everyone will qualify for a Conventional One-Time Close Construction Loan. Your loan amount will depend on your overall financial health and risk level.

The USDA OTC
Construction Loan
Process

Here’s how our home loan process works:

  • Complete our simple Conventional One-Time Close Loan Qualifier
  • Receive options based on your unique criteria and scenario
  • Compare mortgage interest rates and terms
  • Choose the mortgage loan offer that best fits your needs
  • Let us connect you with an Elite Realtor to start the process towards building your perfect home

Get Your FREE Loan Quote Now!

Get Your FREE
Loan Quote Now!

Whether you’re buying a new home, refinancing, looking for a cash-out, or just have questions about the process, our Elite Team of Mortgage Professionals will help you find the right mortgage solution!

Whether you’re buying a new home, refinancing, looking for a cash-out, or just have questions about the process, our Elite Team of Mortgage Professionals will help you find the right mortgage solution!

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