That sounds simple. It isn't always. Lender availability, draw procedures, builder requirements, and rate lock terms vary widely, and not every lender that mentions "construction loans" actually offers a true single close product in your state. Fannie Mae, for example, caps the total construction period at 18 months for single close transactions and won't grant exceptions beyond that window, a detail that catches some borrowers off guard, according to Fannie Mae's Selling Guide.
This review compares six lenders on program availability, borrower fit, construction process support, and transparency. Verify current terms directly with each lender before applying.
Key Takeaways
- One time close loans roll land, build costs, and the permanent mortgage into a single closing.
- Best fit lender hinges on your state, down payment, credit, builder, and land ownership.
- Draw rules, builder approval, and conversion terms matter as much as the advertised rate.
- Get written confirmation the lender offers one time close financing for your state and project type.
Overview of One Time Construction Loans in the U.S. Mortgage Market
A one time construction loan uses one closing for both the construction phase and the permanent mortgage. A two time close structure splits those into separate closings, months apart. Funds aren't handed over as a lump sum in either case; they're released in progress based draws tied to completed work.
A typical lifecycle looks like this:
- Prequalification - income, credit, and down payment review, plus loan program selection.
- Builder and plan review - the lender vets your builder's license, insurance, and track record, then reviews plans and specifications.
- Appraisal - based on the home's proposed completed value, not its current state.
- Closing - one signing event for the construction loan and (in single close structures) the permanent Note.
- Draws and inspections - funds released in stages, each verified by inspection before the next release.
- Conversion - the loan transitions into standard permanent repayment once construction wraps up.
One Time Close vs. Two Time Close
| Factor | One Time Close | Two Time Close |
|---|---|---|
| Closings | One | Two |
| Requalification risk | Lower; permanent terms locked early | Borrower requalifies at second closing |
| Rate timing | Often set before construction begins | Deferred until second closing |
| Closing costs | One set of fees | Two sets of fees possible |
Program eligibility varies just as much as structure does. Conventional, FHA, VA, and USDA all offer construction-to-permanent options, but rules differ sharply.
- VA: Requires a VA registered general contractor and a supervised draw account, with written borrower approval before each disbursement, per VA's construction loan guidance.
- USDA: Single close program fixes the rate at closing, before construction starts, according to USDA's Single close fact sheet.
Land inclusive financing, custom homes, modular construction, and renovation-based programs vary widely too. Some lenders finance the lot and construction together; others require you to already own the land. None of this is standardized across the industry, so treat every "we offer construction loans" claim as a starting point for questions, not a final answer.
Top Lenders for One Time Construction Loans in the U.S.
We reviewed lenders based on verified one time close availability, program breadth, geographic reach, builder flexibility, draw administration, and licensing transparency. Details below reflect published lender information as of this review. Confirm current terms, state availability, and product specifics directly with each lender before applying.
Residential One Lending
Residential One Lending is a full service mortgage brokerage headquartered in Atlanta that connects borrowers with conventional, government backed, and specialty mortgage products, including renovation and construction financing. Its renovation and construction lineup includes FHA 203(k) purchase and refinance loans and Fannie Mae HomeStyle Renovation loans, available in California, Florida, Georgia, New Jersey, and Pennsylvania.
It fits borrowers who want a broker shopping multiple programs instead of one bank's menu. Ask whether a true single close construction-to-permanent product is available for your project—renovation financing and ground-up construction are not always the same.
What to verify:
- Product fit: Which programs cover custom construction versus renovation, and whether land financing is included.
- Borrower requirements: Credit minimums, down payment (renovation programs can allow as low as 3.5% down depending on credit), and whether your builder needs prior approval.
- Service structure: Whether one team handles your file from prequalification through closing, and what documentation your builder must submit.
GO Mortgage
GO Mortgage publishes detailed content on single close construction loans across FHA, VA, USDA, and conventional programs. Its published materials describe rate locks from day one of the process and a construction phase typically running 6 to 12 months.
That written, program specific guidance is useful if you want a clear picture before you call.
What to verify:
- Product fit: Which one time close programs apply if you already own the land, and which construction types (custom, modular) qualify.
- Construction process: Builder licensing/insurance requirements, draw inspection timing, change order procedures, and conversion mechanics after the certificate of occupancy.
- Costs and coverage: GO lists licensing in over 40 states (not including New York); confirm your state and current fee schedule directly, since GO notes that rates and terms may change without notice.
The Federal Savings Bank
The Federal Savings Bank publishes educational comparisons of one time versus two time close construction loans and advertises FHA, VA, and USDA construction options for primary residences. It states it serves borrowers in all 50 states, with disbursements paid directly and in stages to the builder.
Clear side-by-side structure comparisons help if you are still sorting one close versus two close options. Confirm the product is genuinely single close—"construction loan" language sometimes covers both.
What to verify:
- Product fit: Whether FHA, VA, or USDA construction options apply to your occupancy type and land situation.
- Risk management: How rate locks, construction delays, and plan changes are handled mid project.
- Application process: Required builder documentation, including license, insurance, and possibly financials.
Texas Gulf Bank
Texas Gulf Bank, a regional community bank serving the Southeast Texas Gulf Coast, describes a one time close structure combining the lot, construction costs, and a "mini-permanent" mortgage under one closing and one set of fees. Borrowers make interest only payments during construction, and the loan automatically converts to a fixed rate mini-permanent loan once building is complete.
A regional bank like this can appeal to borrowers who value local builder relationships and familiarity with area construction costs. It's not a fit for anyone building outside its service footprint.
What to verify:
- Product fit: Confirm the property must sit within its Texas Gulf Coast service area, and whether site preparation costs are included.
- Builder requirements: A builder contract, full construction budget, and plans/specifications are part of the application.
- Pricing: The bank states a fixed rate throughout construction and the initial mini-permanent period; ask when that rate is actually set.
Family Trust Federal Credit Union
Family Trust Federal Credit Union offers up to 95% financing for stick built, primary residence construction, with draws staged to completed work and paid directly to the builder. It's a credit union, so membership matters: eligibility is limited to people who live, work, worship, or attend school in 17 counties across North Carolina and South Carolina.
This is a strong option for eligible members who want relationship-based service from a local institution, and a non-starter for anyone outside that footprint.
What to verify:
- Product fit: Occupancy is limited to primary residences; confirm land and construction financing rules for your project.
- Approval requirements: Property and (where applicable) flood insurance are required; ask about credit, income, and reserve expectations.
- Costs: Both fixed and adjustable rate options exist. Ask which applies to your loan and what the conversion process looks like.
How We Chose the Best One Time Construction Loan Lenders
This isn't a ranking based on lender size or advertising budget. We prioritized verified product availability and practical usefulness for borrowers planning a build.
Factors that affect your project outcome:
- One time versus two close structure
- How and when the permanent rate is set
- Draw process and who controls fund releases
- Builder approval standards and inspection requirements
- Policies for change orders, delays, and extensions
Borrower and property fit:
- Program eligibility (conventional, FHA, VA, USDA)
- Down payment flexibility and credit requirements
- Land ownership status and occupancy type
- Geographic and state licensing coverage
Use those factors in lender conversations. Before applying anywhere, ask:
- Who controls the draw schedule, and how are inspections handled between draws?
- What happens if construction costs rise above the approved budget?
- Is a second closing required for the permanent mortgage, or is this a true single close product?
- How is my rate protected during construction, and what triggers a relock fee?
- What documentation does my builder need to provide, and when?
Final approval and terms always depend on underwriting and a complete application, not a published rate sheet.
Conclusion
The right one time construction lender is the one whose program, builder requirements, geographic reach, and permanent loan terms actually match your project. A regional bank might beat a national brand if it knows your local builders. A credit union might be unbeatable if you qualify for membership.
Before you commit:
- Compare official Loan Estimates side by side
- Get one time close availability confirmed in writing
- Ask how delays, change orders, and draw inspections will be handled
If you're planning a construction or renovation project, Residential One Lending can walk you through available mortgage options, subject to state availability, underwriting, and credit approval.
Frequently Asked Questions
How does a one time construction loan work?
It combines construction financing and your permanent mortgage into a single closing. Funds release in draws as building progresses, and the loan converts to standard repayment once construction is complete, per the lender's terms.
Do I need 20% down for a construction loan?
Not necessarily. Down payment requirements vary by lender, loan program, land equity, and occupancy type. Some renovation programs allow down payments as low as 3.5% depending on credit. Ask for program specific figures.
How fast can a construction loan close?
Timing depends on your documentation, appraisal, plans, permits, and builder approval, plus the lender's current workload. Ask for a realistic timeline once you've submitted a complete application.
Do you close twice on a construction loan?
Not with a true one time close (single close) structure, which combines construction and permanent financing into one closing. Two Time Close loans require a separate second closing for the permanent mortgage.
Is it difficult to get approved for a construction loan?
It can involve more steps than a standard mortgage, since lenders evaluate your builder, plans, budget, and draw schedule alongside your credit and income. Difficulty varies based on your financial profile and project complexity.
What's the easiest way to get a construction loan?
Get prequalified early, work with an experienced approved builder, and have complete plans and a firm budget ready. Compare lenders that explicitly offer one time close financing for your specific project type.
