FHA OTC Lender

It's great that you have found 2 lenders who can do this, check them out and follow up. I haven't run across many that do.

Great explanation by Joe - but finding a construction loan for 96.5% of the purchase price is probably just as difficult to find as the FHA -OTC

I agree with Joe... I will usually advise my clients to get the construction loan, and then we shop for the best loan when the construction is complete.. One more thing to note.. If your building a custom home, then you will need a construction loan or some type of convertible if that's what your ultimate decision is.. However if you're buying in a new home subdivision (track homes), then most of the time the builder will build your home on his dime.. he will get a deposit from you, but no construction loan is necessary... I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

Good Morning Chris. Our company offers this product through one of our lender partners. If you would like more information, please send me an offline email with any questions you may have. Thank you.

Chris, I too have a lender to funnel this type of transaction to. Contact me for any further details (chad@mortgagewithchad.net).

I would suggest that you explore you options with the gentlemen below that say that they have a source for funding. Many times there are products that FHA will insure but no lenders that will write and fund the loan.

Not all lenders participate in every aspect of FHA... I am not a fan of one time close constructions loans. They sound great, but...

A "one-time-close" financing arrangement for construction financing combines the foregoing three phases into a single combined process. With the "one-time-close" transaction the borrower obtains permanent loan approval and closes the interim and permanent loan transaction prior to the commencement of construction. In essence, the lender acts as both the interim construction lender and the permanent mortgage lender. Because of the unique "two-hat" personality of the lender in this type of financing arrangement, this type of loan is somewhat rare. Other than the fact that the interim and permanent mortgage are closed in a single transaction, this form financing is actually very similar logistically to the traditional construction-to-perm financing arrangement - except you add potential dangers with little value. The closing costs associated with both arrangements will be almost identical. Under both financing arrangements an origination fee or construction fee (usually ranging from 1/2 point to 1 point) and several inspection fees (paid for at each "draw" request) will be paid in connection with the construction phase of the arrangement. And under both financing arrangements the borrower will typically (but not always) pay for construction financing with a variable-rate of interest that will only accrue on the draw portion of the principal amount of the loan as draws of principal are made on the loan. The biggest danger in this transaction lays in two areas. First, the long-term construction loan rarely is the most favorable in the market because the lender has a very captive client. You can't shop anymore for the long-term loan. Because they know you can't shop, the rate is almost always higher than a two close, pick your own long-term lender option. The other issue we see is when there are cost over runs during the construction phase. This presents many problems when you've already closed on the first loan.

Congratulations on the many responses you received.

Hello were you able to find a lender that would do FHA OTC?