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Construction-to-Permanent Loans
Build Your Home With One Closing, One Rate Lock, and No Rate Risk
Your rate is locked at the first closing. It does not change during the build regardless of market movement.
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INTRODUCTION
What is a one-time close construction loan?
A one-time close (OTC) construction loan combines construction financing and the permanent mortgage into a single transaction — one application, one closing, one rate locked at the beginning. When construction is complete and the certificate of occupancy is issued, the loan converts automatically from interest-only construction payments to standard principal and interest. No second application. No second appraisal. No second closing costs. The rate you locked at the first closing is the rate on the permanent mortgage.
The US Census Bureau reported 1.03 million single-family housing starts in 2024. A growing share of those are custom builds on private land — buyers who want the home they designed, not the one a developer built on a spec lot. A construction-to-permanent loan covers the entire build in one transaction. One closing. One rate lock at the beginning — not at completion when rates may have moved significantly. One set of closing costs. The loan funds the build through a draw schedule and automatically converts to your permanent mortgage when construction is complete and the certificate of occupancy is issued.
The rate risk of a two-time close is the primary reason most buyers choose OTC. A 12-month home build can see significant rate movement. Locking the permanent rate at the construction closing eliminates that uncertainty.
1.03 Million Housing Starts in 2024
Custom Builds Demand Specialized Financing
The Census Bureau documented 1.03 million single-family housing starts in 2024. The custom home segment — buyers building on private land with their own builder — represents the fastest-growing share. These transactions require construction-to-permanent financing that most retail lenders do not originate because they require builder approval, draw management, and dual qualification for both construction and permanent phases. Access Financial manages the builder approval alongside the borrower qualification — catching eligibility issues before they cause delays rather than discovering them at the construction closing.
| OTC Construction Financing Insight | Value |
|---|---|
| 1.03M | Single-family housing starts in 2024 — U.S. Census Bureau |
| 1 | Closing required with OTC (One-Time Close) loan — vs 2 closings and double closing costs in traditional construction financing |
| $0 | Rate change risk during construction when using OTC rate lock — protects borrower from market rate fluctuations during build period |
THE 3 QUESTIONS CONSTRUCTION BUYERS ASK MOST
Yes. Rural land construction is supported — including USDA one-time close programs for buyers in USDA-eligible areas. All 55 West Virginia counties are USDA-eligible. USDA construction-to-permanent financing provides $0 down construction financing for eligible rural buyers. For rural land outside USDA-eligible areas, conventional OTC programs apply with standard down payment requirements.
Construction-to-permanent loans typically require 10 to 20% of total project cost — land value plus construction budget combined. If you already own the land, its current equity counts toward the down payment. FHA construction loans accept 3.5% down for owner-occupant primary residences. USDA construction provides $0 down for rural eligible buyers.
The construction loan is fixed at a set amount based on the approved budget. Cost overruns above that amount must be funded by the borrower. Access Financial recommends building a 10 to 15% contingency into the construction budget before the loan is sized — so that minor overruns do not require out-of-pocket funding mid-build.
Build the Home You Designed. One Closing. One Rate. No Surprises
One-time close construction loans lock your rate at the first closing, eliminate the second set of closing costs, and convert automatically to your permanent mortgage at completion. Access Financial qualifies your builder alongside you and manages the draw schedule throughout the build.
Frequently Asked Questions
Most lenders require a licensed general contractor. Owner-builder programs exist but carry higher down payment requirements of 25 to 30%.
Owner-builder programs — where the buyer acts as their own general contractor — are available through some portfolio lenders but require demonstrable construction experience, a licensed subcontractor team, and typically a 25 to 30% down payment. If you hold a GC license, you may qualify as both borrower and contractor. Access Financial evaluates owner-builder scenarios individually.
The lender approves both the borrower and the builder simultaneously. Access Financial qualifies your contractor — licensing, insurance, financial stability — as part of the application.
Builder approval confirms that the contractor is licensed in the state where construction will occur, carries adequate general liability and workers compensation insurance, has not had prior construction loan defaults with the lender, and has demonstrated the financial capacity to manage a project of the size proposed. Issues discovered after the loan closes can cause expensive delays. Access Financial catches them before the first closing.