How FHA one-time-close construction works
The construction and permanent financing are established together rather than requiring a separate permanent mortgage closing after the home is complete. The project still must satisfy construction, builder, appraisal, documentation and FHA requirements.
Who may consider it
This structure may be worth evaluating for borrowers who want FHA financing and are building rather than purchasing an already-completed home.
What needs to be reviewed
- Borrower FHA eligibility and qualification.
- Builder and construction documentation.
- Lot or land details.
- Plans, specifications and construction budget.
- Completed appraised value.
- Required cash, reserves and closing structure.
Why the builder matters
Construction financing is not only a borrower approval. The builder, project and draw process also have to fit the program. That should be checked early, before the buyer commits to a build schedule.