One-time close new construction loans, also known as construction-to-permanent loans, are home loans that are used to finance the construction of a new home and then convert into a long-term mortgage upon completion of the construction. This type of loan allows the borrower to finance both the construction and permanent loan with a single loan closing, which can save time and money.

During the construction period, the borrower typically makes interest-only payments on the loan, which allows them to keep their monthly payments low. Once the construction is complete, the loan automatically converts into a regular mortgage, and the borrower begins making regular principal and interest payments.

One of the key advantages of one-time close new construction loans is that they provide a fixed interest rate for the entire loan period, which helps borrowers to plan their finances. Additionally, these loans typically require lower down payments than traditional construction loans do. The borrower can also lock in their permanent loan interest rate at the time of loan closing, which can help to protect them against future interest rate changes.

To qualify for a one-time close new construction loan, borrowers typically need strong credit and good financial standing. Lenders will evaluate the borrower's credit score, debt-to-income ratio, and employment history to determine eligibility.

Overall, one-time close new construction loans are a good option for borrowers who want to build a new home and finance both the construction and long-term mortgage with a single loan. They offer flexibility, convenience, and a fixed interest rate for the entire loan period.