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USDA One-Time-Close/OTC Construction Loans. 0% Down, 6% Seller Closing Credit Allowed

Build your dream home in a designated USDA eligible area with no money down

With Millennial Home Loans quick online loan application, determining if you qualify for an USDA One-Time-Close/OTC Construction Loan and for how much, has never been easier.

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USDA One-Time-Close/OTC Costruction Loan interest rates change on a daily basis. To receive a quick quote on current interest rates Click Here to receive an update interest rate quote.

USDA One-Time-Close/OTC/Single Close Construction Loan Program Benefits

  • The no money down USDA OTC Construction Loan program allows USDA eligible borrowers to create one loan amount, to purchase a lot, provide interim construction financing, all wrapped into one permanent loan
  • No need to requalify for a permanent loan, upon completion of the construction phase of the project
  • $0 down required, allowing first-time homebuyer and current homeowners an affordable option to build their own custom home
  • Low Monthly Mortgage Insurance or PMI, saving you thousands over the life of the loan
  • Flexible credit requirements, with credit scores down to 640
  • Safe, secure 30 Year fixed rate mortgage
  • With Builder/Retailer closing cost help, no out-of-pocket closing costs
  • Most property types allowed

Everyone Wins with a USDA One-Time-Close Loan:

  • Borrowers:
    • With a USDA OTC Loan, unlike a traditional two-step construction loan, the borrower doesn’t need to re-qualify for the loan upon completion of the construction. With no need to re-qualify for the loan there is no need for reverification of credit, income, assets, or the appraised value of the property
    • With a single close the borrower only qualifies for a mortgage loan once Vs. three separate times as required with a traditional construction-to-perm loan. With a typical two-time construction loan, the borrower must qualify for the construction loan, the take-out loan, and when the home is almost completed as the original borrower documentation and credit reports have expired
    • With a USDA OTC Loan, unlike a traditional Construction-To-Perm loan, borrowers eliminate the cost of refinancing their interim financing loan
    • Interest rate is locked prior to the loan closing, for the life of the loan
    • No mortgage payments during the construction period
    • The loan is fully in place prior to construction
  • Contractors, Builders, Retailers:
    • Obtain the security of knowing that the borrower’s permanent loan will not only be approved, but is closed on prior to starting construction
    • The Builder/Retailer can obtain staged funded draws without having to draw on their own credit lines, thus eliminating their interest costs
    • Typical draw amounts allowed are:
      • No draw option available for all property types, provided the Builder/Retailer agrees to receive all funds upon the completion of the home
      • 3 draws for manufactured/modular housing
      • Funds can be released for the payoff of the manufactured/modular home once offline. Certain restriction applies
      • 5 draws for stick built
    • Expand the pool of eligible customers, that don't have the 10 to 20% down, that is typically required on a Construction-To-Perm project
    • Builders no longer use their credit lines to fund a construction project