A Single Close FHA Construction Loan, or FHA One Time Close Construction Loan, is a type of government insured mortgage that lets home buyers finance and build a new home using only one loan. With an FHA Single Close Construction Loan, the borrower does not have to apply for one loan as the construction loan and another loan as the permanent mortgage, because they close on the one loan only once. One approval, one appraisal, and one set of closing costs are involved in only one closing. The FHA Single Close Construction Loan is insured by the Federal Housing Administration (FHA) and was designed to provide access to new home construction and finance for borrowers who may have low-to-moderate incomes or limited credit.
How Does an FHA Single Close Construction Loan Work?
The FHA single close construction loan simplifies the entire home-building journey. Here’s how it works step by step.
Step 1: Apply for Pre-Approval
The first step is getting pre-approved with an FHA-approved lender like Go Mortgage.
You’ll provide financial documents such as income, assets, and credit information. The lender checks your eligibility for the FHA construction loan program.
Step 2: Choose a Builder
Next, you’ll select a qualified builder who meets FHA standards. Go Mortgage works only with licensed, insured, and approved builders who are experienced with FHA guidelines.
This ensures the project meets all quality and safety requirements from start to finish.
Step 3: Finalize Plans and Get an Appraisal
You and your builder will finalize construction plans, blueprints, and costs.
Go Mortgage then orders an FHA appraisal based on the future value of the completed home, known as the “as-completed” value.
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This appraisal determines the maximum loan amount you can qualify for.
Step 4: Single Closing
Here’s where the “single close” feature comes in.
You close once for both the construction and the long-term mortgage. This means:
One set of closing costs
One loan underwriting process
One final approval
Funds for construction are held in an escrow account and disbursed to the builder in phases as the project progresses.
Step 5: Construction Phase
During construction, your builder receives payments in scheduled draws after inspections confirm work completion.
You typically make interest-only payments during this time, based on the amount disbursed.
Go Mortgage’s construction loan specialists monitor each stage closely, ensuring compliance with FHA guidelines.
Step 6: Move-In and Loan Conversion
Once the home is finished, your loan automatically converts into a permanent FHA mortgage, no second closing, no refinancing, and no new paperwork.
You simply begin making your regular monthly mortgage payments.
Who Qualifies for an FHA Loan for Construction?
To qualify for an FHA mortgage loan home construction, you’ll generally need to meet these requirements:
- Minimum credit score: Typically 620 or higher (some flexibility allowed)
- Down payment: Minimum 3.5% of the total cost (land + construction)
- Debt-to-income ratio: Usually below 43%
- Employment and income verification: Steady, reliable income is required
- FHA-approved builder: Must be licensed and insured
- Primary residence: The home must be your main residence (not an investment property)
Go Mortgage helps guide you through each step, from eligibility review to final move-in, ensuring every requirement is met seamlessly.
Why Borrowers Trust Go Mortgage
Experience & Expertise:
Go Mortgage has deep experience helping borrowers secure FHA one time close construction loans nationwide. Our specialists understand the ins and outs of construction financing and FHA compliance.
Authoritativeness:
As an FHA-approved lender, Go Mortgage follows all FHA lending and construction standards, ensuring full transparency and reliability.
Trustworthiness:
Borrowers choose Go Mortgage because of our honest communication, clear timelines, and personalized guidance from start to finish.
We don’t just offer loans, we offer peace of mind as you build your future home.
Frequently Asked Questions (FAQs)
1. What is the minimum down payment for an FHA single close construction loan?
You can qualify with as little as 3.5% down if your credit score meets FHA guidelines. This covers both the land and construction cost.
2. Can I use an FHA construction loan if I already own land?
Yes. If you already own land, its appraised value can be used as equity toward your down payment.
3. Are there limits to how much I can borrow?
Yes, FHA loan limits vary by county. Go Mortgage can help determine your exact limit based on your location and property type.
4. What happens if construction costs change during the build?
Your builder and lender will review any cost adjustments before additional funds are disbursed. Go Mortgage ensures that any changes comply with FHA rules.
5. How long does the construction process take with a single close loan?
Most FHA one time close construction loans allow 12 months for completion, though timing can vary based on builder schedules and weather conditions.
Conclusion: Build Your Dream Home with Confidence
Constructing your dream home should be an exciting experience, not a stressful one! With a Go Mortgage FHA single close construction loan, you can finance your land, construction and permanent mortgage all in one application and closing! An FHA construction loan is an easy option to affordable home ownership with low down payments, flexible credit requirements, and fixed interest rates that make budgeting for your home easier. This program is for everyone from first-time homebuyers to those building their forever home. The FHA single close construction loan empowers you to build your home with confidence and clarity.
The FHA specialists at Go Mortgage will work with you every step of the way from pre-approval to the day you move in, ensuring your experience with the FHA construction loan is easy, clear and rewarding. With one trusted lender, one simple process and one closing, you can focus on building the home you’ve always imagined.
👉 Start building your future today. Visit Go Mortgage’s FHA Single Close Construction Loan page to learn more and take the first step toward your new home.
