Your guide to: One-Time Close Construction Loans
A One-Time Close Construction Loan simplifies the process of building a new home by combining your construction financing and permanent mortgage into one single loan.
That means one closing, one set of fees, and peace of mind knowing your long-term financing is already locked in before construction begins.
Once your home is complete, the loan automatically converts to a traditional mortgage, eliminating the need for a second closing. This type of loan is a popular choice for California homebuyers looking to streamline their new build and avoid duplicate costs.
One-Time Close vs. Two-Time Close Construction Loans
Traditional construction financing often requires two separate closings—one for the construction loan and another for the permanent mortgage once the home is built. This can lead to paying fees twice and facing new loan terms or higher rates later.
A One-Time Close Construction Loan removes that uncertainty by combining both into a single process. You close once, pay fees once, and have your permanent financing in place from the start, providing a smoother experience and protecting you from potential market changes during construction.
Loan Program Options and Requirements
US Lending Company offers Conventional, FHA, and VA One-Time Close Construction Loans to meet a range of borrower needs.
- Conventional loans require as little as 5% down and a minimum credit score of 700.
- FHA loans offer flexible qualification guidelines with just 3.5% down and a minimum credit score of 580.
- VA One-Time Close Construction Loans are available with 0% down and a minimum credit score of 660 for eligible veterans and active-duty service members.
These programs give California homebuyers flexible options to build the home they’ve always wanted—without juggling multiple loans or closings.
Note: All programs require working with a licensed, approved builder (not owner-builder projects). Contact a US Lending Company loan officer to determine which program best fits your situation.
Eligible Projects and Builder Requirements
One-Time Close Construction Loans are designed for qualified builders, not owner-builders. This ensures that all construction meets professional standards and follows lender-approved guidelines.
Borrowers work with licensed and approved builders who provide detailed plans, budgets, and timelines before the loan is finalized. This added layer of oversight helps ensure that your new home project stays on track and aligns with your approved financing.
Common Questions About One-Time Close Loans
Q: Can I use a One-Time Close loan for a manufactured or modular home?
A: Depending on the loan type and property guidelines, it may be possible, though some restrictions apply. Speak with your loan officer to confirm eligibility.
Q: What happens if my construction costs go over budget?
A: A built-in contingency fund—often up to 10%—is included to cover unexpected expenses. Any unused funds are applied to reduce your loan balance once construction is complete.
Q: Do I make payments during construction?
A: During construction, payments are typically interest-only based on funds disbursed. Once your home is complete, the loan converts into your long-term mortgage with regular principal and interest payments.
Start Building with Confidence
If you’re planning to build in California, our team can guide you every step of the way. We’ll help you explore your options and find the right program for your goals. Get connected with a trusted loan officer today by visiting our Loan Officer Directory or reaching out through our Contact Page.
Have some questions? No worries. Tap the green button below!
Looking for more resources? Explore our blog or meet our loan officers for personalized advice.
NOTE: Not a commitment to lend. All loans are subject to credit approval and program guidelines. Terms and availability may change without notice. Equal Housing Lender. US Lending Company, a division of American Pacific Mortgage Corporation, NMLS #129988, NMLS #1850.
The views, articles, postings, and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation or US Lending Company.
* For loan examples and more information visit our disclosure page at https://www.uslendingcompany.com/disclosures/
