What a One-Time Close Construction Loan Is
A one-time close (OTC) construction loan combines construction financing and your permanent mortgage into a single loan with one closing. You lock terms once, before construction, and the loan converts automatically when the home is complete.
Who It's For
- Buyers who want rate and cost certainty before building
- Those avoiding a second closing and its costs
- Borrowers concerned about requalifying after construction
- Anyone building a primary residence on a timeline
How It Works
You close once before the build starts, locking your terms. During construction, funds release in draws. When finished, the loan converts to a standard mortgage automatically — no requalification, no second closing, no mid-build rate risk.
Frequently Asked Questions
What's the advantage over a two-time close?
One closing means one set of costs, locked terms before you build, and no requalification risk after construction — protection against rate or income changes during the build.
Can I lock my rate before construction?
Yes — that's a core benefit of the one-time close structure. We'll explain the lock options available.
What happens when construction finishes?
The loan automatically converts to your permanent mortgage on the terms you locked at closing — no new application.