Contact Us Find an Advisor Make a Payment Account Login LOAN PROGRAMS RESOURCES ABOUT APPLY NOW GET RATES Fannie Mae Single Close Construction Loans If you’re considering building a new home, but worried about the intimidating expenses and time consumption that comes from taking out multiple loans, GO Mortgage can help. With a Fannie Mae Single Close Construction Loan, there’s no need to take out separate loans for construction and a mortgage. Here, GO Mortgage will help you understand how this is possible and how you can qualify for a Fannie Mae Single Close Construction Loan. WHAT IS A FANNIE MAE SINGLE CLOSE CONSTRUCTION LOAN? A Fannie Mae Single Close Construction Loan is a mortgage loan insured by Fannie Mae. This type of loan is suited for newly constructed single-family homes. It combines the purchase of the property or lot with the construction of the house to deliver a myriad of benefits to borrowers. The main differentiator of this loan, as opposed to traditional mortgages, is that this loan only requires a single closing. Borrowers can also benefit from a low down payment and competitive interest rates. HOW DOES A FANNIE MAE SINGLE CLOSE CONSTRUCTION LOAN WORK? A Fannie Mae Single Close Construction Loan is a loan that eases the difficult process of financing new home construction. When building a new single-family home, borrowers traditionally have to take out a loan for construction expenses in addition to financing the land. This process requires two separate closings, which will cost the borrower more money. Fannie Mae Single Close Construction Loans allow the borrower to close both the construction loan and permanent financing at the same time. Once the construction process is completed, the loan will convert into a permanent loan. Fannie Mae allows borrowers to lock in interest rates prior to closing, while also allowing them to adjust to the lowest interest rate available during the construction process when converting to the permanent mortgage. Overall, this form of loan combines the interim construction loan with the permanent financing. It eliminates the need for separate loans and closings. A Single Close Construction Loan from Fannie Mae can ease the stress for the borrower significantly. WHAT ARE THE LOAN QUALIFICATIONS FOR A FANNIE MAE SINGLE CLOSE CONSTRUCTION LOAN? In order to qualify for a Fannie Mae Single Close Construction Loan, a borrower must meet the following requirements: Construction to permanent transaction may not exceed 12 months Eligible homes include site-built single-family homes, modular, as well as manufactured home (MH) The borrower must use his or her own funds to make the minimum borrower contribution unless: The LTV or CLTV ratio is less than or equal to 80%; Or the borrower is purchasing a one-unit principal residence and meets the requirements to use gifts, donated grant funds, or funds received from an employer to pay for some or all of the borrower's minimum contribution The borrower has a minimum credit score of 680 WHAT ARE THE BENEFITS OF A FANNIE MAE SINGLE CLOSE CONSTRUCTION LOAN? A Fannie Mae Single Close Construction Loan can help borrowers everywhere significantly. From saved time to locked interest rates, Single Close Construction Loans simplify the mortgage process immensely for borrowers. Here is what a borrower can benefit from when choosing Fannie Mae Single Close Construction Loans: Save Time & Money Since Fannie Mae makes single closing a possibility, borrowers only have to be present for and pay for one closing. This one closing will cover both the purchase of the lot and the construction of the new home. Locked-In Interest Rate With Fannie Mae, borrowers are provided with the opportunity to lock in interest rates prior to closing. In addition to this, borrowers can also adjust their interest rates when transitioning to the permanent mortgage if interest rates drop during the construction period. Customized Solutions Fannie Mae Single Close Construction Loans allows borrowers to build homes of any kind. No matter if the borrower is tearing down an old house, building new on a vacant lot, or buying a manufactured home, Fannie Mae can help. WHAT ARE THE ALTERNATIVES TO A FANNIE MAE SINGLE CLOSE CONSTRUCTION LOAN? A Fannie Mae Single Close Construction Loan is one of the best solutions for builders looking for an affordable way to construct a new home. If this loan is not within financial means for a builder, here are a few alternatives: Veterans Administration One-Time Close - available for veterans or active duty military persons that are building a new home Fannie Mae Home Ready Program - available for low to medium-income families looking to finance a home for as little as 3% down These loans are affordable solutions for families looking for alternatives to Single Close Construction Loans. These are just a few alternatives, as there are plenty of loan options available for builders everywhere. WHAT ARE THE STEPS INVOLVED IN APPLYING FOR A FANNIE MAE SINGLE CLOSE CONSTRUCTION LOAN? When applying for a Fannie Mae Single Close Construction Loan, there are a number of steps to take in order to apply and eventually qualify for the loan. Below is how any borrower can begin the application process: Contact a Fannie Mae lender to get pre-approved for the loan A credit review will be conducted to determine your ability to repay the loan Make sure to check for any inaccuracies on the credit report. Rectify these inaccuracies before the credit review process takes place Be prepared to demonstrate proof that you either currently own or will be purchasing a lot on which your property is going to be built You will most likely need to have a contract with a Fannie Mae-approved builder A financial review will also be conducted to ensure you can meet the minimum down payment required by Fannie Mae FANNIE MAE SINGLE CLOSE CONSTRUCTION LOAN WITH GO MORTGAGE GO Mortgage is your partner for all Fannie Mae Single Close Construction Loan solutions. Our team will provide you with guidance to ensure you receive a mortgage solution that saves you time and money. There’s no need to be intimidated by a mortgage ever again with your partners at GO Mortgage. We are licensed in 35 states including a team specifically for Minnesota loans. Reach out to us today to get your Fannie Mae Single Close Construction Loan started! Conventional Loans Construction Loans Rate Calculators About Go Mortgage, LLC, NMLS ID #1018, NMLS Consumer Access 15430 West Capitol Drive Brookfield, WI 53005 contactus@gomortgage.com (800)-444-RATE Careers Disclosure Information Terms of Use Privacy Policy Accessibility Statement Copyright 2020 GO Mortgage. All Rights Reserved.