One-Time Close Construction Loans in Colorado

What is a Construction loan? A one-time close construction loan is a type of loan that allows you to finance both the construction of a new home and its permanent mortgage in one single closing.
Down Payment Requirement: Typically, a 3.5% down payment is required for this loan. USDA requires 0%(Rural areas). Depending on which program is chosen, land equity may be used towards this amount.
Quick Close: On average, the loan process takes around 30 days for closure.
Builder Approval: The builder must be approved; self-construction isn't allowed.
Payment Suspension During Construction: Borrowers do not make payments during the construction phase; payments begin once construction is completed. There is no need to re-qualify at the end of construction.

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Phases:

Outlined below are the pivotal stages of the construction loan process.

Phase 1 (Approval):

Pre-Approval: Obtain pre-approval for the loan.
Land Acquisition: Identify and secure the land for construction.
Builder Selection: Choose a builder, who must either be pre-approved or undergo an approval process.
Quote: The builder provides a comprehensive quote covering all aspects of home construction.

Phase 2 (Construction):

Closing Period: If land is purchased, the initial draw covers land acquisition costs within 30 days.
Commencement of Construction: After loan approval and closure, construction begins according to the agreed plans.

Funds Disbursement: Lenders release funds to cover material, labor, and other expenses in stages known as "draws." There may be up to four draws without additional fees; thereafter, a fee of $175 per draw applies.

Phase 4 (Inspections and Completion):

Final Inspections: The final phase involves construction completion, final documentation, and an appraisal to ensure the property's value meets the permanent mortgage requirements.

USDA One-Time Close Construction Loan

0% Down Payment: The USDA One-Time Close Construction Loan is a great option for homebuyers looking to build their dream home in rural areas with no down payment. Like the FHA 3.5% down loan, the USDA loan offers a streamlined construction-to-permanent financing process that simplifies building and financing your home. However, with USDA loans, there is no down payment required, making it a more accessible option for eligible buyers.
Eligible in Rural Areas: This loan is specifically designed for rural and suburban areas, promoting homeownership in these communities: USDA Eligibility Map

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