USDA Single Close Construction Loan Lenders: A Guide for Homebuyers

The USDA Single Close Construction program allows you to get a single loan for both construction and permanent financing of a new home in eligible rural areas This streamlines the process and reduces costs compared to applying for separate construction and mortgage loans

But which lenders actually offer USDA single close loans? In this comprehensive guide, we’ll overview the program, benefits, and provide a list of participating lenders across the U.S.

What is the USDA Single Close Construction Program?

The Single Close Construction program is part of the USDA’s Single Family Housing Guaranteed Loan Program (SFHGLP). It provides a single, streamlined loan for building and then permanently financing a home in rural communities.

With traditional construction loans, you must apply for and close on separate construction financing and then permanent mortgage financing. This requires two sets of closings, fees, and interest rates.

The USDA Single Close Construction program combines these into one loan with one closing, eliminating duplicate costs and paperwork.

Key Benefits of Single Close Construction Loans

Combining the construction and permanent financing provides several advantages

One closing & set of fees – Avoid duplicate loan application, processing, and closing costs
Single interest rate – Get one fixed low rate for the full term instead of higher short-term construction rates
Easier qualifications – Reduce complexity by only needing to qualify once for the combined loan
Earlier principal paydown – Interest paid during construction goes directly toward principal once converted to permanent loan
Time savings – Eliminates hassle of applying for and closing on separate loans
Payment flexibility – Make interest-only payments during construction phase before full amortizing payments
Easier administration – Single lender handles the entire process from construction to mortgage

For eligible homebuyers, single close construction loans can greatly simplify building a home.

Overview of Participating USDA Lenders

The USDA partners with approved private lenders to offer its Single Close Construction program. Participating lenders have been authorized by USDA Rural Development to directly make single close loans.

Here are some things to know:

Lenders apply and must meet Rural Housing Service standards to participate.
The list of participating lenders changes periodically as new lenders join.
Some lenders only operate in certain states or regions.
Loans are subject to Rural Development and lender underwriting standards.
The USDA guarantees the loans, providing security for lenders.

Let’s look at the current roster of authorized lenders across the country offering USDA single close construction financing.

Authorized Lenders by State

Here is a state-by-state breakdown of which lenders currently participate in the USDA Single Close Construction program:

Alabama

1st Signature Lending
Assurance Financial Group
Metroplex Mortgage

Arizona

1st Signature Lending
Evergreen Home Loans
On Q Financial

Arkansas

1st Signature Lending
Flat Branch Mortgage

California

1st Signature Lending
Evergreen Home Loans

Colorado

1st Signature Lending

Delaware

Atlantic Bay Mortgage Group

Florida

1st Signature Lending
AmeriFirst Financial Corp.
Metroplex Mortgage
Union Home Mortgage

Georgia

1st Signature Lending
Atlantic Bay Mortgage Group
Union Home Mortgage

Idaho

Evergreen Home Loans
Union Home Mortgage

Illinois

Flat Branch Mortgage
Union Home Mortgage

Indiana

1st Signature Lending
AmeriFirst Financial Corp.
American Security Mortgage Corp
Union Home Mortgage

Kansas

Flat Branch Mortgage
GSF Mortgage Corp

Kentucky

1st Signature Lending
AmeriFirst Financial Corp.
Stockton Mortgage Corp.
Union Home Mortgage
Western Ohio Mortgage Corp.

Louisiana

Assurance Financial Group
GSF Mortgage Corp
Union Home Mortgage

Maryland

Atlantic Bay Mortgage Group

Michigan

AmeriFirst Financial Corp.
GSF Mortgage Corp
Lake Michigan Credit Union
Union Home Mortgage

Minnesota

Union Home Mortgage

Missouri

Flat Branch Mortgage
Union Home Mortgage

Montana

Evergreen Home Loans

Nevada

1st Signature Lending
Evergreen Home Loans

New Jersey

Union Home Mortgage

New Mexico

1st Signature Lending

New York

NBT Bank

North Carolina

1st Signature Lending
American Security Mortgage Corp
Assurance Financial Group
GSF Mortgage Corp
Union Home Mortgage

Ohio

1st Signature Lending
Stockton Mortgage Corp.
Western Ohio Mortgage Corp.
Union Home Mortgage

Oklahoma

Flat Branch Mortgage

Oregon

1st Signature Lending
Evergreen Home Loans
GSF Mortgage Corp

Pennsylvania

1st Signature Lending
Union Home Mortgage

Puerto Rico

Multiples Mortgage Corp
VIG Mortgage

South Carolina

1st Signature Lending
Atlantic Bay Mortgage Group
Union Home Mortgage

South Dakota

Bankwest Inc.

Tennessee

1st Signature Lending
American Security Mortgage Corp
Metroplex Mortgage
Union Home Mortgage

Texas

1st Signature Lending
Metroplex Mortgage
Union Home Mortgage

Utah

1st Signature Lending
On Q Financial
Union Home Mortgage

Virginia

1st Signature Lending
Atlantic Bay Mortgage Group
Union Home Mortgage

Washington

1st Signature Lending
Evergreen Home Loans
GSF Mortgage Corp

West Virginia

1st Signature Lending
Union Home Mortgage

Wisconsin

GSF Mortgage Corp

Wyoming

Union Home Mortgage

This covers currently approved national and regional lenders offering USDA single close construction loans. Be sure to confirm participation with individual lenders as the list may change over time.

Getting Started with a Single Close Construction Loan

If interested in a single close construction loan for your new home, follow these steps:

Check eligibility – Confirm you meet USDA single close loan requirements for income, credit, rural property location, etc.
Find a lender – Search for participating lenders in your state from the list above.
Apply – Complete a single close loan application with a chosen lender.
Build – If approved, finalize construction plans and build your home. Make interest payments during construction.
Convert to mortgage – Once home is complete, loan converts to permanent mortgage. Begin making full principal and interest payments.

Streamline the construction financing process and save on costs by connecting with an authorized USDA single close lender servicing your area today.

USDA One-Time Close Construction – The Basics

Designed to simplify the financing process for homebuyers, eliminating the need to obtain both a construction loan and permanent mortgage
Up to 100% Maximum LTV
For Construction-to-Permanent, closing occurs before construction begins
No payments due during the construction phase
Closing costs may be financed
30-year fully amortizing fixed
No re-qualification once construction is complete
A single closing reduces closing costs, saving your borrowers money

What is the USDA One-Time Close Construction Loan?

The USDA One-Time Close (OTC) Construction loan is a product that allows borrowers to combine financing for a lot purchase, construction and permanent mortgage into one first mortgage loan. Ideally suited for borrowers who are purchasing new construction, the USDA OTC loan offers the benefits of one closing for all financing.

Updated USDA OTC Program overlays and eligibility include:

Site-Built, Modular and Manufactured homes:
- Maximum of $250,000 disbursement at closing for land acquisition or payoff.
Building permits (where required by the jurisdiction):
- Site-Built and Modular home – applicable building permits to be obtained prior to closing.
- Manufactured home – applicable building permits to be obtained prior to closing when the initial disbursement is greater than $75,000.
A minimum five percent (5%) contingency of the total cost to construct be built into the contract price. The contingency is not required for No Draw manufactured Home Transactions.

USDA Construction Loan Explained by a USDA underwriter

FAQ

How to qualify for a USDA loan in Tennessee?

To secure a USDA loan, you must meet certain income restrictions. In Tennessee, you cannot bring home over 15% more than your area’s median income. The exact amount will depend on which county you live in but averages $91,900 for a family of four and $121,300 for families of five or more.

Does Texas lending do construction loans?

Construction Loans with Our Specialized Team — Texas Lending Partners. You have come to the right place! We close over $150M in Build on Your Lot Construction Loans. We work with a variety of builders and borrowers, each with a different scenario or financial goal.

Does Bank of America do USDA loans?

This too is a very useful and effective home loan to use when buying a home. Obviously, Bank of America is one of the largest USDA lenders in California.

Who offers a single-close construction-to-permanent loan?

Click here for a list of lenders currently offering USDA’s Single-Close Construction-to-Permanent loan program. Allied Mortgage Group, INC. American Financial Resources, INC. Amerifirst Financial, INC.

Does USDA offer a combination construction-to-permanent loan program?

For example, USDA recently partnered with 1 st Signature Lending, based in Indiana, to help people build homes financed through the Combination Construction-to-Permanent Loan Program. Chief Operating Officer Joe Willing highlights many of the program’s benefits.

How do I get Started with the combination construction-to-permanent loan program?

How do we get started? • Lenders: To be eligible to participate in the combination construction-to-permanent loan program, a USDA Rural Development approved lender must have two years of experience in originating and administering construction loans.

What are the requirements for a USDA new construction loan?

For a USDA new construction loan, the project’s contractors must meet certain qualifications. USDA loans are designed to help moderate- and low-income Americans become homeowners. They do this by offering affordable financing for real estate in designated rural areas.