Quick answer
In 2025, the requirements for one-time close construction loans vary by loan type. FHA and VA offer low or no-down payment options, USDA supports rural borrowers, and conventional loans require higher credit but offer more flexibility. All programs require a licensed builder, approved plans, and a primary occupancy permit.
What’s new for construction loan eligibility in 2025
As the demand for custom-built and modular homes continues to grow, one-time close construction loans remain a smart financing solution for homebuyers. These loans bundle the purchase of land, the cost of construction, and the permanent mortgage into one loan with a single closing.
In 2025, updates to credit standards, builder requirements, and loan limits are shaping how borrowers qualify for these loans—whether through FHA, VA, USDA, or conventional programs. This article breaks down the latest guidelines to help you compare programs and prepare for approval.
Build your 2025 dream home with financing from GO Mortgage.
General one-time close loan requirements
Regardless of loan type, most one-time close programs require borrowers to meet these baseline qualifications:
- Primary residence only (no investment or second homes)
- Licensed and insured builder approved by the lender
- Detailed construction plans and cost breakdown
- Appraisal based on the finished home’s value
- Lender-managed draw schedule for releasing construction funds
- Property must meet local zoning and code standards
Additional program-specific rules apply depending on whether you choose an FHA, VA, USDA, or conventional loan structure.
FHA one-time close loan requirements (2025)
The FHA one-time close loan is designed for borrowers with lower credit scores or smaller down payments. It remains one of the most accessible options for first-time homebuilders.
| Requirement | 2025 Standard |
| Minimum Credit Score | 600 (some lenders may allow 580) |
| Down Payment | 3.5% of the appraised value |
| Max LTV | 96.5% |
| Debt-to-Income Ratio (DTI) | Typically 43% or lower |
| Builder Approval | Required |
| Mortgage Insurance | Upfront MIP + annual premium |
| Occupancy | Must be primary residence |
| Property Type | Stick-built, modular, panelized homes on a permanent foundation |
Note: The upfront Mortgage Insurance Premium (MIP) can be financed into the loan.
VA one-time close loan requirements (2025)
The VA one-time close loan offers zero-down construction financing for eligible veterans, active-duty service members, and qualifying surviving spouses.
| Requirement | 2025 Standard |
| Minimum Credit Score | 620+ (lender-specific) |
| Down Payment | None required with full entitlement |
| Max LTV | 100% of appraised value |
| DTI Ratio | Typically up to 41%, may vary |
| Certificate of Eligibility (COE) | Required |
| Funding Fee | May apply (exemptions available) |
| Builder Approval | VA-approved builder required |
| Property Type | Must be permanent, affixed housing |
Note: No monthly mortgage insurance is required. The VA funding fee can be rolled into the loan amount.
USDA one-time close loan requirements (2025)
The USDA one-time close loan is available in designated rural areas and supports 100% financing for eligible borrowers with low to moderate incomes.
| Requirement | 2025 Standard |
| Minimum Credit Score | 640+ |
| Down Payment | None required |
| Max LTV | 100% of appraised value |
| Income Limits | Must meet local area median income caps |
| Rural Property Eligibility | Must be in USDA-approved zone |
| Builder Approval | Required |
| Mortgage Insurance | Annual fee required |
| Occupancy | Primary residence only |
Note: USDA guidelines can be strict about location and income. Check your ZIP code for eligibility.
Conventional one-time close loan requirements (2025)
Conventional construction loans are best suited for borrowers with higher credit scores, larger down payments, or projects that don’t meet government loan guidelines.
| Requirement | 2025 Standard |
| Minimum Credit Score | 700+ recommended |
| Down Payment | 5% to 20% depending on loan size and property |
| Max LTV | Typically 80%–95% |
| Mortgage Insurance | Required for LTV >80% |
| DTI Ratio | 43% or lower preferred |
| Builder Approval | Required |
| Property Type | More flexibility, including higher-end custom builds |
Note: Conventional loans may offer more favorable pricing for borrowers with larger loan amounts or those with strong credit profiles.
How to prepare for a one-time close loan approval in 2025
Even if you meet the basic requirements, preparing your application in advance can improve your chances of approval and streamline the entire process.
Here’s how to get ready:
- Check your credit report: Review your score and resolve any errors. Paying down revolving debt can help improve your DTI ratio
- Gather income documentation: Be ready to provide recent pay stubs, tax returns, and W-2s or 1099s. Lenders need to verify steady income
- Choose your builder early: Work with a licensed contractor who is experienced with lender draw schedules and inspections
- Request a prequalification letter: This shows how much you can borrow and what loan type best matches your profile
- Understand your project costs: Submit detailed plans, materials estimates, and a line-item budget with your application
Being organized and proactive helps you secure the best terms and meet 2025 program requirements with confidence.
FAQ: One-time close loan qualifications
Q: What’s the minimum credit score to get a one-time close loan in 2025?
A: It depends on the program. FHA may allow scores as low as 580 (most lenders prefer scores of 600 or higher), VA usually requires a score of 620 or higher, USDA prefers a score of 640 or higher, and conventional loans generally start at 700 or higher.
Q: Can I build on land I already own?
A: Yes. If you already own land, the equity may count toward your down payment or help reduce your loan amount. The land must meet lender and zoning guidelines.
Q: Do I need a licensed builder to qualify?
A: Yes. All programs require you to use a licensed, insured, and lender-approved builder. Owner-builders are typically not allowed unless you have a general contractor license.
Q: Can I use a one-time close loan to build a modular home?
A: Yes. Most one-time close programs support modular or panelized homes as long as they’re affixed to a permanent foundation and meet all building codes.
Q: Is mortgage insurance required?
A: FHA and USDA loans require mortgage insurance. VA loans do not, but a funding fee may apply. Conventional loans require PMI if your down payment is under 20%.
Build smarter with the right loan in 2025
Knowing the updated requirements for one-time close construction loans helps you choose the right program—and avoid delays or disqualifications. Whether you’re using FHA, VA, USDA, or conventional financing, GO Mortgage can guide you through each step.
Our team will:
- Review your credit and income against the current 2025 standards
- Confirm land and builder eligibility
- Walk you through the full approval and closing process
- Match you with the best program for your financial goals
Ready to build? Get started today with GO Mortgage and explore your one-time close loan options for 2025 and beyond.