One-Time Close Construction
Build your dream home with a single loan that converts to a permanent mortgage — one closing, one set of fees.
Program Overview
A one-time close (OTC) construction loan combines your construction financing and permanent mortgage into a single loan with a single closing. During the construction phase, you make interest-only payments on funds drawn. Once the home is complete, the loan automatically converts to a standard mortgage with principal and interest payments — no second closing, no requalification, no additional fees.
Who Is This Loan For?
- ✓ Homebuyers building a custom home from the ground up
- ✓ Buyers purchasing a lot and constructing a new home
- ✓ Borrowers who want to lock their permanent rate before construction begins
- ✓ Owner-builders (select programs)
Key Benefits
Single Closing
One appraisal, one closing, one set of fees — saving thousands compared to two-close programs.
Rate Lock at Close
Lock your permanent mortgage rate at the start — before construction begins.
Interest-Only During Construction
Pay only interest on funds drawn during the build phase, keeping costs low.
Automatic Conversion
When construction is complete, the loan converts to your permanent mortgage with no additional steps.
Qualification at a Glance
General Requirements
- Credit score of 680+ for most programs
- Down payment of 5–20% depending on program
- Licensed builder/general contractor required
- Approved plans, specs, and construction budget
- Appraisal based on plans and specs (future value)
- Construction timeline typically 12 months max
Advantages
- ✓ One closing saves time and money
- ✓ Lock permanent rate before building
- ✓ Interest-only during construction
- ✓ No requalification at conversion
- ✓ FHA, VA, and conventional options
Tradeoffs to Consider
- ↔ Builder must be licensed and approved
- ↔ Construction timeline limits
- ↔ More upfront documentation
- ↔ Draws and inspections during build
- ↔ Higher complexity than standard purchase
Common Scenarios
Custom Home Build
A couple purchases a lot for $80K and builds a $320K home. The OTC loan finances both the lot and construction ($400K total), with interest-only payments during the 10-month build, then converts to a 30-year fixed mortgage.
Documents Typically Needed
- Builder qualifications and license
- Construction plans, specs, and budget
- Land purchase agreement or proof of ownership
- Standard income and asset documentation
- Appraisal based on plans (future value)
Frequently Asked Questions
One-time close has a single closing for both construction and permanent financing. Two-time close requires a separate construction loan closing and then a permanent mortgage closing — costing more in fees and requiring requalification.
Broker Disclosure: Scout Financial Group Inc DBA Airus Lending is a licensed mortgage broker (NMLS #2187418) and does not make loans or credit decisions. Airus Lending works with multiple wholesale lenders to help borrowers compare available loan options. Final approval depends on the lender, automated underwriting findings, documentation, state requirements, and overall borrower profile. Not all applicants will qualify.