New Construction (OTC)
One-Time Close (OTC) New Construction loans finance the land and construction, converting to a fixed mortgage upon project completion.
Building a home from the ground up is an exciting journey, but securing the right financing can be complex. A One-Time Close Construction Loan streamlines the process by combining construction financing and permanent mortgage financing into a single loan, eliminating the need for multiple approvals and closings. Instead of dealing with separate loans, this option provides a single approval process, one closing, and a locked-in interest rate, making it a simpler and more cost-effective solution.
With a One-Time Close Loan, borrowers make interest-only payments during construction, and once the home is complete, the loan automatically converts into a traditional mortgage without requiring refinancing or a second closing. This saves time, reduces costs, and provides financial stability throughout the building process. Additionally, borrowers secure their interest rate upfront, protecting them from potential market fluctuations during construction. If interest rates drop before the loan converts to a permanent mortgage, some programs offer a float-down provision, allowing borrowers to secure a lower rate before finalizing their long-term financing.
Construction loans typically require a solid credit history and stable income to demonstrate the borrower's financial stability and repayment ability. Additionally, borrowers may need to provide detailed plans and specifications for the construction project, including architectural drawings, cost estimates, and construction timelines.
Not sure which loan option is right for you? As a Mortgage Broker, we take a single application and use it to pre-qualify you for a variety of loan types, ensuring you receive the best possible financing solution for your unique situation. With our ClearPath™ application system, you have full transparency and flexibility, allowing you to move forward with confidence.
Highlights
Low Down Payment Options
Contractor and Project Approval Required
Max Debt-To-Income Ratio up to 50%
700 Min Credit Score
*Information provided is for educational purposes only and is subject to change. All loan programs, interest rates, down payment requirements, and terms are subject to credit approval, underwriting guidelines, investor requirements, and may change without notice. Not all applicants will qualify. Restrictions may apply, including but not limited to geographic limitations, property type, and occupancy requirements.