What is the FHA One-Time Close?

FHA One-Time Close: What You Need to Know

The FHA One-Time Close loan is an “all-in-one” package that allows borrowers to finance more than just the cost of an existing home. The FHA allows you to finance everything necessary for a home, even if it is not yet constructed, including the lot, construction of the home, and a permanent mortgage. Like other FHA loans, the FHA One-Time Close loan requires a minimum down payment of 3.5% and requires mortgage insurance premiums be paid throughout the life of the loan.

Designed to help homeowners build their own dream home, the One-Time Close loan program offers greater flexibility in terms of work history and income requirements. They even have higher debt-to-income ratio requirements – borrowers only need a 50% DTI to qualify. These loans share the same county-specific maximum lending amounts as other FHA loans. Both sellers and builders can contribute up to 6% toward a homebuyer’s closing costs, and contributions that go beyond the 6%-mark are actually deducted from the loan principal itself.


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