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Are you considering building your own home? Are you planning on taking out separate loans for the construction process and the home itself? The Federal Housing Administration (FHA) offers loans that can save you both time and money. These are called Single Close Construction Loans or One-Time Construction (OTC) Loans.
Learn more about these loans below!
An FHA One-Time Close (OTC) Loan is a popular loan for anyone who is looking to build a new single family home. An FHA OTC loan allows the borrower to combine financing for the purchase of the lot and the construction of the building into a single loan. The lending option has been specifically designed for borrowers who would like to build a home with a low down payment option.
This loan has a low money down requirement, competitive interest rates, and only a single closing. For this reason, an FHA Single Close Construction Loan is a popular lending option for single family home construction projects.
This loan has been specifically created to make the financing process easier for buyers who are constructing a newhome. In the past, people used to have to take out separate loans for the construction costs (commonly called an interim construction loan) and the mortgage (which is often called the permanent loan). In addition, these loans used to have separate closing costs, which only drives up the price of the project.
Now, this FHA OTC Loan wraps up the financing into one convenient package. This loan has been insured by the Federal Housing Administration (FHA), which keeps the interest rates low. With borrowers already dealing with the details of constructing a new home, this is an easy way to take care of the financing process with a single loan. With one loan closing package, one promissory note, and one deed, this is the ideal loan for anyone looking for construction financing.
In order to be eligible for an FHA OTC Loan, there are a few criteria that must be met:
While the maximum amount of the loan might vary from location to location, these eligibility requirements are standard.
There are several benefits that everyone should note of an FHA OTC Loan. Some of the most important benefits include:
These are only a few of the many benefits that are going to accompany an FHA OTC Loan. It is easy to see why this loan has become so popular among individuals and families building their own homes!
An FHA OTC Loan is only one option for people who are looking to build their own home. There are a few options that might work better depending on someone’s individual situation. Some of the most common alternatives include:
The good news is that there are plenty of loan options out there for almost everyone.
If you are interested in applying for an FHA OTC Loan, there are a few steps that you should follow. The most important steps include:
If you are looking for an FHA OTC Loan, then look no further than GO Mortgage. At GO Mortgage, we provide comprehensive services that walk you through the process from start to finish. Our caring professionals are here to advocate for your needs. Call us today to learn more about how we can help you!