One-Time Close (OTC) Hub

A coordinated path from land & plans to permanent financing.

Eliminate double closing costs and post-construction re-qualification risk. Our One-Time Close construction loan locks your 30-year rate upfront and provides structured draw milestones for custom builders.

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How OTC Works for Homebuilders & Families

Traditional construction lending requires a short-term bank loan followed by an uncertain permanent mortgage refinance. OTC wraps everything together:

Land Equity: Existing lot value applies directly toward your down payment requirement.
Rate Protection: Your 30-year permanent interest rate is locked before footers are poured.
Interest-Only Draws: Pay interest strictly on disbursed funds during the 9 to 12-month build phase.
Automatic Conversion: Upon Certificate of Occupancy, the loan transitions into your permanent amortized mortgage without another closing.

Borrower Eligibility & Underwriting Specs

Max LTV / Financing:Up to 90-95% of total completed appraised value (conventional / government options)

Credit Score:680+ for conventional OTC; 620-640 for eligible government construction options

Allowed Build Types:Site-built single family, modular homes

Construction Terms:Up to 12 months with extension provisions

Project Execution

Recent Construction Loan Scenarios

Landowner Custom Build in East Tennessee

Tennessee · One-Time Close ConstructionReviewed 2024

Borrower GoalBuild a custom craftsman home on owned land without depleting cash reserves.

Financing ChallengeClient owned 3 acres free-and-clear worth $120,000 and wanted to construct a $450,000 custom craftsman without depleting cash savings.

Structure UsedUtilized the appraised $120,000 land value as the borrower's equity contribution for a 1-Time Close construction loan.

Why This StructureApplying land equity toward the down payment removed the need for a separate cash contribution and locked the permanent rate before construction began.

Verified OutcomeBorrower brought zero cash down to the closing table; construction funds disbursed over 9 months; seamlessly converted to a 30-year fixed.

Limitations & NotesLand equity was credited at appraised value; a recent purchase price would have required seasoning before counting toward down payment.

Custom Builder Pipeline Partnership in North Dallas

Texas · One-Time Close ConstructionReviewed 2024

Borrower GoalTake on more concurrent custom builds without tying up commercial credit.

Financing ChallengeBuilder was carrying construction bank debt on their own balance sheet, capping how many concurrent custom builds they could take on.

Structure UsedTransitioned clients to borrower-financed OTC construction loans with Simple Mortgage Solutions handling draws and builder approvals.

Why This StructureMoving the construction debt to each borrower's file freed the builder's commercial lines and gave clients a single-closing structure.

Verified OutcomeBuilder freed up their commercial credit lines, increasing their annual delivery capacity by 4 homes.

Limitations & NotesBuilder approval and draw timing depended on inspection availability; severe weather could shift a draw by several days.

OTC Construction FAQs

Clear guidelines on land equity, draw timelines, and cost overrun contingencies.

What is the difference between a One-Time Close and a Two-Time Close?

A two-time close requires an interim short-term construction loan from a local bank, followed by a separate permanent mortgage refinance upon completion—meaning two loan applications, two appraisals, and two sets of closing costs. A One-Time Close (OTC) combines both into a single transaction with one closing and an upfront permanent rate lock.

Can I use equity in my land toward the down payment?

Yes! If you already own the lot, its appraised market value (or equity above any existing land loan) can count directly toward your required equity down payment.

How are draws paid to the general contractor?

Draws are released as construction milestones are verified. The builder submits a draw request, an independent inspector inspects the job site to confirm completion percentage, and funds are disbursed typically within 48-72 business hours.

What happens if construction takes longer than expected?

OTC programs typically allow 9, 11, or 12-month construction periods with predetermined extension options to safeguard against weather delays or supply chain issues.