Build your Dream Home with a 10% Down, One-Time Close Construction Loan
Construction Home Loans are a great way to finance your American dream home. Although Construction Loans are often thought of as out-of-reach due to up to 30% down requirements and high interest rates, Hurst Lending offers several affordable construction loan options to fit your unique situation.
Adding to our existing FHA Construction Loan program and VA Construction Loan program, Hurst Lending is excited to offer a new tool to finance the construction of your dream home – a 10% down, one-time close construction loan with lower interest rates and better loan terms than what is currently on the market. This program allows you to lock in one long-term fixed rate loan and avoid the additional closing costs (and headaches) associated with getting a construction loan and a permanent loan separately.
For borrowers with credit scores of at least 720, the One-Time Close Construction program provides:
- One-time close loans up to $484,350
- 6 / 9 / 12-month construction terms
- Interest-only payments during construction
- Ability to finance soft costs, like architectural and engineering designs and permit fees
What is the difference between a One-Time Close Loan and a traditional construction loan?
Our new, 10% down, one-time close loan program covers up to 90% of land purchase and construction costs. Traditional construction loans only cover 70% to 80% of the land payment and have higher, short-term loan rates instead of lower, long-term mortgage rates. Additionally, construction loans generally require an origination fee (usually 1%), which is not required for the One-time close loan.
How does the 10% Down, One-Time Close Construction Loan program work?
You find the land you want to buy and apply for a loan with us and we provide a loan to cover the price to purchase the land plus the cost to build a home on your lot. If you have already purchased the land, our loan will pay off your current land loan in addition to financing the costs of construction. Under this program, you receive a single long-term, low fixed rate loan to cover the whole loan process instead of dealing with the hassle and increased financial burden of securing a construction loan in addition to a permanent loan after your home is complete.
Once your loan is approved, loan funds are disbursed to your builder as the home is built and the loan automatically converts into a regular mortgage, with regular monthly principal and interest payments once construction is complete. If you need help finding a builder, our construction loan experts can help connect you to builders they have worked with in the past to help identify the best one for your home.
What’s the difference between the VA, FHA, and One-Close Construction Loans?
The VA Construction Loan program is an excellent option for veterans that allows veterans to use their VA benefits towards securing their dream house. However, this program is exclusively for veterans. The one-time close construction loan is for all Americans looking to build their dream home.
The FHA Construction Loan program is a great program for couples with less credit history or less-than-perfect credit scores to build a home meeting their every specification for only 3.5% down (which can be a gift from a family member or friend). However, for borrowers with a higher credit score who can afford 10% down, the one-time close construction loan offers lower rates and better terms.