Construction loans that close once, from lot to move-in
Buy the lot or build on one you own, pay your builder in stages and move in on the same loan. Choose from three options through our lending partners: a conventional one-time close loan, a VA one-time close loan with up to 100% financing for eligible veterans on loans up to $4 million, and a construction HELOC, offered on a limited basis.
(No SSN or Credit Check Required for Estimate)
What is a construction loan, and how does a one-time close work?
A construction loan pays for building a home in stages, as the work gets done, instead of all at once. A one-time close construction loan, also called a construction-to-permanent or single-close loan, pays for the lot and the build and then becomes your permanent mortgage when the home is finished. You close once, pay one set of closing costs and qualify up front, before construction starts.
A two-time close takes two loans: a short-term construction loan, then a new mortgage when the house is done. That means two closings, two sets of costs and qualifying again at whatever rates and guidelines exist at move-in. Every option on this page closes once. Our guide to how to finance building a house walks through the whole plan, step by step.
Modern Home Lending is a mortgage broker licensed in Arizona, Colorado, Florida and Georgia. We arrange construction financing through our lending partners. You will see your lending partner’s name on your loan documents. On the one-time close loans, its construction team handles the draws, the staged payments to your builder, after closing.
Which construction loan fits your build?
Here are the three options side by side. Loan-to-value (LTV) is the loan as a percentage of the home’s value. The rest is your down payment, or equity in land you already own.
| Conventional one-time close | VA one-time close | Construction HELOC (new) | |
|---|---|---|---|
| Maximum loan | The conforming limit: $832,750 for a 1-unit home in most areas for 2026, higher in high-cost areas | Up to $4,000,000 | Up to $1,999,000 at 65% LTV or less; up to $1,000,000 above 65% |
| Maximum LTV | Up to 95% on a 1-unit primary home | Up to 100% for eligible veterans | Up to 85% on a 1-unit primary home (80% in Florida) on lines up to $1,000,000 |
| How you use the home | Primary, second home or investment | Primary home only | Primary home, or a 1-unit second home |
| Property | 1 to 4 units, including modular homes; manufactured homes as a primary or second home | 1 to 4 units, including modular and manufactured homes | 1 to 4 units; manufactured homes not eligible |
| Closings | One | One | One |
Loan limits are 2026 figures and reset each January. Program details were checked in October 2026. Programs, rates, and terms are subject to change without notice. This is not a commitment to lend. All loans are subject to credit approval and program guidelines.
Renovating instead of building?
The loans on this page are for building a new home. If you would rather buy a fixer-upper, remodel or expand the home you own, or add a casita, a renovation loan is usually the better fit.
A renovation loan finances the home and the cost of the work together, based on what the home will be worth once the work is done. FHA, conventional and VA versions are available, and we will help you compare them with building new.
How much can you borrow on a conventional construction loan?
A conventional one-time close loan can go up to your county’s conforming loan limit, which for 2026 is $832,750 for a 1-unit home in most of the country. That limit is the largest loan Fannie Mae and Freddie Mac can buy, set each year by the Federal Housing Finance Agency (FHFA), and it caps the loan amount, not the price of the home.
| Area | 2026 limit, 1-unit home |
|---|---|
| Most of the country, including every county in Arizona and Georgia and every Florida county except Monroe | $832,750 |
| Denver metro (Adams, Arapahoe, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson and Park counties) | $862,500 |
| Boulder County, Colorado | $879,750 |
| Monroe County, Florida (the Keys) | $990,150 |
| Some Colorado mountain counties, such as Grand, Summit, Pitkin and Eagle | $883,200 to $1,249,125 |
Limits are higher for 2 to 4 unit homes and reset each January. The 2027 limits are usually announced in late November. Look up any county on FHFA’s loan limit page, or see our conventional loan page.
You can finance up to 95% on a 1-unit primary home, so as little as 5% down. Second homes, investment properties and some 2 to 4 unit homes are eligible too, with lower maximums, and maximums can also be lower in declining markets. Need to borrow more than your county’s limit? The construction HELOC below allows lines up to $1,999,000 when the line is 65% of the home’s value or less, and up to $1,000,000 above that, at up to 85% LTV on a 1-unit primary home (80% in Florida). Our VA one-time close goes up to $4 million for eligible veterans.
Does land you already own count toward your down payment?
Yes, on the conventional one-time close. If you already own the lot, the loan is based on the appraised value of the finished home and land, so your land equity counts toward the down payment, and the loan can pay off a remaining lot loan. If you are buying the lot at closing instead, the loan is based on the lower of your total cost (lot plus build) or the appraised value of the finished home.
On the VA one-time close, the loan covers the build plus anything you still owe on the lot, and equity in land you own can lower the VA funding fee. The construction HELOC can also pay off a lot loan as part of the build. On the one-time close loans, land equity cannot pay your closing costs.
Can you build a house with a VA loan?
Yes. Our VA one-time close covers the lot and the build for eligible veterans and service members, with one closing.
- Loans up to $4,000,000. That is our lending partner’s program maximum. VA itself sets no loan limit for borrowers with full entitlement, meaning you have not used your VA home loan benefit or it has been fully restored.
- Up to 100% financing for eligible veterans, based on the lower of the appraised value of the finished home or your total cost. Total cost is the build plus the lot price, or plus what you still owe on a lot you already own. The build includes the required 5% contingency, a cushion for cost overruns, and any interest reserve.
- No down payment with full entitlement, as long as the appraisal supports your total cost. If it comes in lower, you pay the difference. If part of your entitlement is tied up in another VA loan, a down payment may apply on larger loans.
- Primary residence only, 1 to 4 units.
- Optional interest reserve: construction-period interest can be paid from loan funds built into the budget. Without one, you make interest-only payments during the build.
- The VA funding fee, a one-time fee paid to VA, applies unless you are exempt, for example if you receive VA compensation for a service-connected disability.
- Bring cash for closing costs. Only the VA funding fee can be added to the loan. Other costs are paid at closing, though builders can offer credits.
- Program rules: your builder must be approved by our lending partner, you cannot act as your own builder (an owner-builder project), and the program cannot be used to renovate an existing home. To improve a home instead, see renovation loans, which include a VA option.
New to the VA benefit? Our VA loan page covers eligibility, your Certificate of Eligibility and the funding fee.
Can you use a HELOC to build a house?
Yes, two ways. A HELOC on a home you already own can help pay for part of a build, such as the lot. Or a construction HELOC from one of our lending partners, offered on a limited basis as of October 2026, can be the main loan on the property you are building. Unlike a typical HELOC, it is a first lien, not a second mortgage behind another loan, so one line can cover the lot and the build.
- Lines up to $1,999,000 when the line is 65% of the home’s value or less, and up to $1,000,000 above that, from a $50,000 minimum.
- Up to 85% LTV on a 1-unit primary home, 80% on a 2-unit primary home or a 1-unit second home, and 65% on a 3 to 4 unit primary home. Florida is capped at 80%, and maximums can be lower in declining markets.
- 680 minimum credit score, plus cash reserves after closing from your own funds. Gift funds do not count.
- Primary homes with 1 to 4 units and 1-unit second homes, with ADUs (accessory dwelling units, such as a casita) allowed on 1 to 2 unit properties.
- Built for the project: the line can pay for the lot purchase or payoff, construction, contingency and interest reserves, permits, professional fees, inspections and closing costs. It cannot be used to pay off other debts.
- Not available for investment properties, manufactured homes, homes on leased land, or homes with age (55+) or other resale restrictions. Building in an age-restricted community? Ask us about a one-time close instead.
A construction HELOC tends to fit when you have plenty of equity or already own the land, especially on a larger build or a second home. The line comes from a credit union, so you become a member as part of the application. We will compare it side by side with a one-time close before you choose.
Your builder gets approved too
Every one-time close loan includes a builder review before closing. Your builder provides a questionnaire, a state contractor license, proof of workers’ compensation insurance (or a statement of exemption), a W-9 and a copy of a driver’s license. The project gets its own review: the signed construction contract, the budget, plans and specs, and permits if any work has already started.
Bring your builder in early. A builder our lending partner approved within the last 12 months can often be reused with current insurance and license documents.
How does a one-time close construction loan work, step by step?
A one-time close takes six steps, from pre-approval to move-in:
- 1Get pre-approved and price the build. We add up the lot, the construction contract and a 5% contingency, then match you to the right program.
- 2Builder and project approval. Your builder and the project are reviewed before closing, using the documents listed above.
- 3Appraisal based on the plans. The appraiser values the home as it will be built.
- 4Close once. The lot is purchased or any lot loan is paid off, and a first draw of up to 10% of the build cost can be set aside at closing to get your builder started.
- 5Build, paid in draws. Your builder is paid in stages, each released after an inspection confirms the work.
- 6Move in. After the final inspection and certificate of occupancy, you sign the agreement that converts the loan to your permanent mortgage, and principal and interest payments begin. If rates have dropped enough since you closed, you may be able to float down to a lower rate at conversion.
The construction HELOC works differently: it is a line of credit opened at one closing, and we will walk you through how it works when we quote it.
What can a construction loan pay for?
A construction loan can cover more than the lot and the house:
- The lot, bought at closing, or an existing lot loan paid off.
- The construction contract with your builder.
- A contingency reserve: 5% of construction costs is built into every one-time close budget, and any unused amount pays down your balance.
- Costs you paid before closing, such as permits, plans or special-order materials. On the one-time close loans, they can count toward your share of the cost if you document the payment and where the money came from.
- An interest reserve for construction-period interest, optional on the VA one-time close and an allowed use of the construction HELOC.
- Inspections along the way.
Who is a construction loan for?
A construction loan fits if one of these sounds like you:
Planning a build? Start with the numbers
Tell us about the lot, the build budget and where you are building, and we will show you which option fits. No SSN or credit check required for the estimate.
Construction loan FAQs
Do I have to put 20% down on a construction loan?
No. On a 1-unit primary home, the conventional one-time close needs as little as 5% down. The VA one-time close needs no down payment for eligible veterans with full entitlement, when the appraisal supports your total cost. The construction HELOC needs 15% (20% in Florida) on lines up to $1,000,000, and larger lines are capped at 65% LTV.
What credit score do I need for a construction loan?
It depends on the option. The construction HELOC needs a credit score of at least 680. On the conventional one-time close, approval runs through Fannie Mae or Freddie Mac automated underwriting rather than one published cutoff score, though a score under 620 combined with recent late payments on an installment loan can make you ineligible. On the VA one-time close, VA sets no minimum score, so the lender’s credit guidelines apply.
What is the loan limit for a conventional construction loan in 2026?
The 2026 conforming loan limit is $832,750 for a 1-unit home in most of the country, including all of Arizona and Georgia and every Florida county except Monroe. High-cost areas get more, including the Denver metro at $862,500, Florida’s Monroe County at $990,150 and Colorado’s Eagle County at $1,249,125. Limits reset each January.
Is a one-time close construction loan worth it?
Usually, if you want one approval, one set of closing costs and a rate set before you build. The trade-offs are the builder and project paperwork, an 11-month build window and costs a regular mortgage does not have, such as draw inspections and builder’s risk insurance during construction.
How long can construction take?
The one-time close loans allow up to 11 months to build. The agreement that converts the loan to your permanent mortgage has to be signed within 12 months of closing, or you have to qualify again. If you expect a longer build, tell us up front so we can match the program to your timeline.
Do I make payments while my home is being built?
On the conventional one-time close you make interest-only payments on the funds drawn so far. On the VA one-time close, an optional interest reserve can pay construction-period interest from loan funds; without one, you make interest-only payments. After the loan converts, your payment includes principal as well as interest, so it goes up.
Can I build while I still own my current home?
Yes, but you qualify with your current mortgage payment and the new loan together, unless you sell your current home before closing.
What happens if rates drop while my home is being built?
On the one-time close loans, your rate is set at closing. If rates have dropped enough by the time the home is finished, you may be able to float down to a lower rate when the loan converts. If rates have risen, your rate does not go up at conversion.
Can I be my own builder?
On the conventional one-time close, owner-builders can be eligible for a primary residence if they pass the lending partner’s builder review, including a state contractor license. Owner-builder projects are not eligible on the VA one-time close.
Can I build a modular or manufactured home?
Yes, on the one-time close loans, which accept modular and manufactured homes, with draws matched to how factory-built homes are paid for. The construction HELOC does not take manufactured homes.
Can I build a barndominium with a construction loan?
Yes, on the one-time close loans, as long as the appraisal can show comparable homes that support its value. Unique homes depend on those comparables, so tell us about your plans early.
Can I use a construction loan to renovate or add on to my home?
Not these. The one-time close loans and the construction HELOC on this page are for building a new home. To remodel, expand or add a casita to a home you own, or to buy a fixer-upper, a renovation loan finances the work based on what the home will be worth once it is done.
Do I need a construction loan to buy a new build from a builder?
Usually not. If the builder finances construction and sells you the finished home, a regular purchase loan does the job, and it is worth comparing against the builder’s advertised rate. A construction loan is for when you hire a builder to build on a lot you own or are buying.
Where does Modern Home Lending offer construction loans?
Modern Home Lending is a mortgage broker licensed in Arizona, Colorado, Florida and Georgia, and we arrange these loans through our lending partners. Program availability can vary by state, and the construction HELOC is capped at 80% LTV in Florida.