Updated: Dec 1
Owning a home in Florida is easier with the USDA One Time Close Construction Loan. This loan lets you buy a home without a down payment and covers 100% of the cost.
Bennett Capital Partners offers this special program to Florida residents. If you are in an eligible area you can benefit from this program.
In this blog post, we'll go into detail about the USDA One Time Close Loan Program.
✅ The USDA One Time Close Loan in Florida combines construction and permanent financing into one loan, simplifying the process for borrowers.
✅ It offers a single loan instead of separate loans, saving time and paperwork while also allowing for no down payment.
✅ This loan has a low upfront guarantee fee, 100% financing availability, and lower minimum credit score requirements compared to other types of construction loans.
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What is a USDA One Time Close Loan?
A USDA One Time Close Loan is a unique financing option that combines both construction and permanent financing into one loan. It is available through lenders approved by the USDA rural development program, allowing borrowers to build their dream homes in qualifying rural areas.
Combination of construction and permanent financing
A USDA one-time close loan packs two things in one. This type of loan brings together what we call 'construction financing' and 'permanent financing'. First, it covers the money you need to build your dream home.
This is known as construction financing. Once your home is ready, the same loan then switches over to permanent financing. That's like a regular mortgage that helps you pay for your house over time.
The best part? You only close once on this kind of loan, not twice! So, it saves both time and money by combining these two parts into one single loan deal.
Eligibility for USDA rural development approved lenders
To be a USDA rural development approved lender, certain rules must be followed. These lenders must have good history in loan work. They should know about home loans and the housing market well.
This knowledge helps them guide people who want to buy homes. Also, they need approval from USDA's Rural Development program. Bennett Capital Partners Mortgage is an approved USDA Mortgage broker in Florida and can help connect you with the best USDA lender for your deal.
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Understanding the Benefits
One of the main advantages of a USDA One Time Close Loan is that it combines both construction and permanent financing into a single loan, making the process simpler and more streamlined for borrowers.
Single loan instead of separate loans
A single loan makes life simple. You don't need to deal with many loans at once. It saves your time and cuts down on paperwork. With one loan, you only pay one set of closing costs.
This can save you money too. A single USDA One Time Close Loan does all of this for you! You get funds to buy land, build a home, and then live in it — all under one roof! This means less stress for you during the building process.
For Florida residents, this option is great since our USDA loan demands no down payment.
Low upfront guarantee fee
With a USDA One Time Close Loan, one of the benefits you can enjoy is a low upfront guarantee fee. This fee is typically lower compared to fees associated with other types of loans.
The guarantee fee helps fund the USDA loan program and ensures that it remains available for future homebuyers. By keeping this fee low, it makes it more affordable for borrowers who are looking to build their dream home in eligible rural areas.
So if you're considering a USDA One Time Close Loan in Florida, you can take advantage of this benefit and save on your upfront costs.
100% financing available
With a USDA One Time Close Loan, you can get 100% financing for your home construction project. This means that you don't have to worry about coming up with a down payment. It's an excellent option for those who want to build their dream home but may not have the funds for a large down payment.
With this loan, you can start building your home without having to save up thousands of dollars upfront. It makes homeownership more accessible and helps turn your dreams into reality.
Plus, since it's a USDA loan, you'll benefit from low mortgage rates and other assistance programs available to eligible applicants.
Lower minimum credit score requirement
The USDA One Time Close Loan has a lower minimum credit score requirement compared to other types of construction loans. This means that borrowers with less-than-perfect credit have a better chance of qualifying for the loan.
Instead of needing an excellent credit score, a lower score can still meet the eligibility requirements. This makes the USDA One Time Close Loan more attainable for a wider range of borrowers who may not have been able to qualify for traditional construction loans.
It provides an opportunity for individuals and families with lower credit scores to build their dream homes in eligible rural areas without facing as much financial barriers.
How to Qualify for a USDA One Time Close Loan
To qualify for a USDA One-Time Close Loan, you will need to find a USDA-approved contractor and a construction loan lender. The easiest way is to work with an experienced broker, such as Bennett Capital Partners, who can guide you in the right direction, and submit your application. But there's more to learn about the process!
Keep reading to find out the specific steps and usda construction loan requirements.
Finding a USDA-approved contractor
To qualify for a USDA One Time Close Loan, you will need to find a contractor who is approved by the USDA. This is an important step in the loan process as the lender wants to ensure that the construction of your home meets their guidelines.
A USDA-approved contractor has experience in building homes that meet quality and safety standards set by the USDA. They also have knowledge of using environmentally friendly and energy-efficient practices in construction.
It is recommended to research local contractors who are experienced with USDA loans and have a good track record of completing projects on time and within budget. Asking for recommendations from friends or family who have built homes using a USDA loan can also be helpful.
Finding a USDA construction loan lender
When looking for a USDA construction loan lender, it's important to find one that is approved by the USDA. This ensures that they meet the necessary requirements and can offer you the loan you need.
You can start by researching online or asking for recommendations from friends or family who have used USDA lenders before. Once you have a list of potential lenders, take the time to compare their interest rates, terms, and fees.
It's also a good idea to read reviews or testimonials from other borrowers to get an idea of their reputation and customer service. Choosing a Florida Mortgage Broker like Bennett Capital Partners Mortgage can be advantageous as they specialize in USDA loans and can guide you through the process efficiently.
Submitting an application
To apply for a USDA One Time Close Loan, you will need to gather some documents. These include proof of income, employment verification, and credit history. You may also need to provide information about the property you want to build or buy.
Once you have all the necessary paperwork, you can submit your application to Bennett Capital Partners. We will review your information and let you know if you are approved for the loan.
It's important to make sure your application is complete and accurate to increase your chances of approval. Keep in mind that the USDA loan program has specific eligibility requirements, so it's important to familiarize yourself with them before applying. Dont worry, a mortgage professional at Bennett Capital Partners will be by your side and available to answer any questions you have.
Other Options for Financing
In addition to the USDA One Time Close loan, there are several other financing options available in Florida for those looking to build their dream home. These alternatives include the USDA loan, VA one-time close construction loan, FHA one-time close construction loan, and conventional one-time close construction loan.
Each option has its own unique features and requirements that borrowers should consider before making a decision.
A USDA loan is a type of mortgage loan that can help you buy a home with no down payment. It is designed for low- and very-low-income applicants in eligible rural areas. The program provides payment assistance to those who qualify, helping them achieve the dream of homeownership.
With a USDA loan, you can also get help with paying closing costs or making improvements on your property. This loan program offers many benefits and can be a great option if you're looking to buy a home in Florida.
To learn more about eligibility requirements and how to apply, read the article linked above.
VA one-time close construction loan
If you're a veteran looking to build your dream home, Bennett Capital Partners offers a VA one-time close construction loan that could be an option for you. Similar to the USDA one-time close loan, this program combines both construction and permanent financing into one loan.
With a VA loan, eligible veterans can enjoy benefits such as no down payment requirement and low interest rates.
One of the advantages of a VA one-time close construction loan is that it eliminates the need for multiple loans. Instead of having separate loans for construction and permanent financing, everything is rolled into one.
This simplifies the process and saves you time and effort.
Another benefit is that there's no down payment required for qualified veterans. This means you can start building your home without having to worry about coming up with a large sum of money upfront.
FHA one-time close construction loan
The FHA one-time close construction loan is another option offered by Bennett Capital Partners for people looking to build their dream home. This loan program, insured by the Federal Housing Administration (FHA), allows borrowers to combine construction and permanent financing into a single loan.
It offers benefits such as low down payments and lower minimum credit score requirements, making it accessible to more people. The FHA one-time close construction loan is designed for those who want to build a new home or renovate an existing one, providing them with the necessary funds throughout the construction process.
This loan can be a great choice for individuals who don't qualify for traditional construction loans or prefer the flexibility and convenience of having only one closing instead of multiple ones.
Conventional one-time close construction loan
If you're looking to build a new home and considering financing options, you might be able to take advantage of a conventional one-time close construction loan. This type of loan offetred by Bennett Capital Partners is different from government-backed options like USDA or FHA loans.
It's designed for those who prefer a traditional route for their construction project.
Unlike government-backed loans, conventional one-time close construction loans are not insured by the government. With this type of loan, borrowers usually need to make a down payment of 3% to 5% for their primary residence.
The interest rates on these loans may vary depending on factors such as credit score and financial history.
Some people choose conventional one-time close construction loans because they offer flexibility in terms of lenders and loan amounts. They provide an alternative option for those who don't meet the eligibility criteria for government-backed programs or prefer working with private lenders.
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In conclusion, a USDA One Time Close Loan is a fantastic option for Florida residents looking to buy a home with no down payment. This program provides low mortgage rates and assistance to eligible applicants, making it easier to own decent and safe housing in rural areas.
If you're considering this type of loan, Bennett Capital Partners Mortgage has the expertise and focus on USDA loans in Florida. Contact us today for all your lending needs.
Commonly Asked Questions
What are the requirements for a USDA construction loan?
The requirements for a USDA construction loan include meeting the income eligibility requirements, having a credit score of at least 640, purchasing a property that is located in an eligible rural area, and the property must be a site-built home, not a manufactured home
How do USDA construction loans work?
USDA construction loans work by providing borrowers with the funds needed to build their home. The loan is then converted into a permanent mortgage once the construction is complete.
What are the benefits of a USDA One Time Close Loan?
The benefits of a USDA One Time Close Loan include a simplified loan process, lower down payment requirements, and the ability to finance both the construction and permanent mortgage with a single loan.
Can I get a USDA construction loan for a manufactured home?
Yes, you can get a USDA construction loan for a manufactured home as long as it meets the requirements set by the USDA.
What are the pros and cons of USDA construction loans?
The pros of USDA construction loans include lower down payment requirements, fixed interest rates, and the ability to finance the entire construction cost. The cons include the limitations on property location and stricter eligibility requirements.
How does the USDA One Time Close Loan program work?
The USDA One Time Close Loan program allows borrowers to finance both the construction and permanent mortgage with a single loan. It simplifies the loan process and reduces the need for multiple loans.
What is the maximum loan amount for a USDA construction loan?
The maximum loan amount for a USDA construction loan is determined by the appraised value of the property and the borrower's income.
What is the difference between a USDA construction loan and a traditional construction loan?
The main difference between a USDA construction loan and a traditional construction loan is that the USDA loan is guaranteed by the U.S. Department of Agriculture and has specific eligibility requirements.
What are the loan options available through USDA construction loans?
The loan options available through USDA construction loans include fixed-rate mortgages, adjustable-rate mortgages, and loans with various term lengths.
What are the advantages of using a USDA One-Time Close Loan for the land purchase and construction phases?
A USDA One-Time Close Loan streamlines the financing process by allowing you to use a single loan to cover both the land purchase and the construction of a home, including when construction begins. This loan type eliminates the need for a separate construction loan right and final loan, reducing paperwork and closing costs.
Can a USDA One-Time Close Loan be used for both new construction and existing homes?
While primarily designed for new construction, a USDA One-Time Close Loan can also be used for significant renovations on an existing USDA home, effectively treating it like new construction-to-permanent loan program. It allows borrowers to close on the loan once and fund the work on the home with the loan proceeds.
Is there a benefit to the fixed-rate loan feature of the USDA One-Time Close Loan?
Yes, the fixed-rate loan feature of the USDA One-Time Close Loan provides stability with consistent monthly payments. This is advantageous over some traditional construction loans require that may offer variable rates, which can lead to unpredictable future payments.
Who is best suited to help me through the process of a USDA One-Time Close Construction Loan?
When considering a USDA One-Time Close Construction Loan, it's wise to consult with experienced loan officers and mortgage brokers who specialize in USDA loans. They can guide you through the loan to purchase process, ensuring you meet all the criteria and take full advantage of what the USDA construction loan allows, including its single-close feature.
Do lenders offer USDA-approved construction loans for home renovations in Florida?
In Florida, select lenders and mortgage brokers offer USDA single-close loans that can be used not only for new construction but also for extensive renovations, allowing homeowners to manage a renovation project associated with the home under the one-time close usda construction loan umbrella. This program provides the convenience of one application, one closing, and one fixed loan.
What is a USDA one-time close construction loan?
A USDA one-time close construction loan is a single close loan product that covers both the construction phase and becomes the permanent mortgage when building work ends.
How can I use a USDA construction loan in Florida?
You can use a USDA construction loan to build your home or for the land you wish to create on, turning it into your final fixed-rate permanent mortgage once complete.
Are there any special requirements for getting such loans?
To qualify for a USDA construction loan, applicants must have a credit score typically above 640, adhere to income limits set for their specific county, and maintain a debt-to-income ratio under certain thresholds. The property in question must be situated in an eligible rural area as defined by the USDA, and meet all federal and USDA-specific safety and quality standards.
What's different between two-time close and usda otc (one time close) loans?
Two-time close means two separate loans - one for the land or house build and another as the final monthly mortgage; but with USDA OTC Loan they merge as one making it easier.
Can I buy manufactured or mobile homes using this type of loan in Florida?
Yes! The said program supports buying of both single family homes along with property types like manufactured or mobile homes too!
Where do I go if I want more details about USDA Construction Loans?
The best way would be reaching out to an expert mortgage broker in your area who offers these particular products, especially those specializing in VA One-Time Close Construction Loans alongside regular ones!
Philip is the owner and principal mortgage broker at Bennett Capital Partners, Bus. NMLS # 2046828. He earned his degree in Accounting and Finance from Binghamton University and holds a Master's Degree in Finance from NOVA Southeastern University. With more than 20 years of experience, Philip has been a leader in the mortgage industry. He has personally originated over $2 billion in residential and commercial mortgages.
Learn more about Philip Bennett's background and experience on our Founder's page. Whether you're a first-time homebuyer or a seasoned real estate investor, our team is here to help you achieve your real estate goals. Don't wait any longer, contact us today and let us help you find the right mortgage for your needs.