At Indigo Mortgage in New Mexico, we strive to educate borrowers on the options available. If you or someone you know is interested in building their dream home from scratch, we are here to help! Here’s what we think you should know about one-time close (OTC) construction loans.

Just recently, United Wholesale Mortgage, now the largest mortgage company in America, announced they will be offering a one-time close construction loan with as little as five percent down. The only way to access this new five percent down construction loan is through a mortgage broker like Indigo Mortgage. Our team has been offering construction loans for twenty years, but this is the first time we have had access to the one-time close loan from Fannie Mae.

The benefit of these one-time close construction loans is the five percent down and the fact that there is only one closing. The loan will give the borrower up to eleven months to build their new home. During that time, they pay interest-only payments. When the new home is completed, the loan automatically converts to a thirty-year mortgage at the same rate without a second closing. The borrower locks in the thirty-year rate at the beginning of construction. The great part about this is if rates come down when the loan is ready to convert to the 30-year mortgage, the borrower can float down the rate at that time. This loan will also pay for the land purchase and the cost of building if they do not own the land already. Some other requirements are no owner-builders are allowed, there must be a credit score of at least 700, and no manufactured homes can be financed.

If you are in the market for a new home and considering building one, Indigo Mortgage in Albuquerque is here for you! Our team of experts will ensure you are taken care of from start to finish.

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