Turn "there is nothing for sale" into "let's build it."
When inventory is thin, some buyers decide to build. This guide helps Realtors in Sacramento, Northern California, New Jersey, and nationwide understand how construction financing works, how to write lot and build contracts with realistic timing, and when to bring Ken Clark Jr. into the conversation.
Short answer: because buyers who cannot find the right resale home may be able to build, and land listings sell faster when buyers know how to finance them.
Construction financing is not complicated once you know the order of steps. A Realtor who can explain the basics keeps buyers engaged instead of losing them to months of waiting for inventory.
Short answer: one loan and one closing that may cover the lot, the construction, and the permanent mortgage for eligible buyers.
The buyer closes before construction starts. The lot is purchased or paid off at closing, construction funds are released to the builder in draws, and the loan converts to the permanent mortgage at completion without requalifying. Options include FHA (as little as 3.5 percent down for eligible borrowers), VA (up to 100 percent for eligible veterans with full entitlement), USDA (up to 100 percent in eligible rural areas for eligible buyers), and conventional. Full detail: one-time close construction loans.
Short answer: the lot has to work for both the buyer's plans and the loan program.
More in the buy land and build guide.
Short answer: give the financing contingency enough time for the whole construction package, not just a resale-style underwriting timeline.
A one-time close file needs the builder's registration, a signed fixed-price contract, plans and specifications, a line-item budget, an appraisal based on the plans, and underwriting. That commonly takes about 60 to 75 days or more from application. In California, permits typically must be issued before closing, which can add time.
Practical approaches Realtors use include longer financing contingencies on lot contracts, feasibility periods for soils, well, and septic, and confirming the buyer has a builder selected before writing the offer. Contract terms are between the parties and their attorneys or advisors; this is general education, not legal advice.
Short answer: the lot can be included in the one-time close loan, with any land loan paid off at closing, and land equity may help cover the down payment.
Short answer: a licensed builder acting as the general contractor, a fixed-price turnkey contract, builder's risk insurance, and builder registration. Owner-builder projects are not eligible on one-time close.
Share the Builder Registration Checklist with the builder early. For VA loans, the builder also needs a VA builder ID. Builders can find everything in the Builder Resource Center.
Builder registration is a documentation review for program eligibility. It is not an endorsement, recommendation, or guarantee of any builder's work.
Short answer: schedule a short call before the lot offer is written, or have the buyer book directly.
Where available: PRMG programs are available in every state where PRMG is licensed, which is all states except New York, including California and New Jersey, subject to eligibility and program guidelines. In California, permits are typically required before a one-time close loan closes.
Answered by Ken Clark Jr., Certified Mortgage Advisor. Program availability and requirements vary and are subject to change.
Yes, for eligible buyers, a one-time close loan may finance the lot, construction, and permanent mortgage with one closing.
Commonly about 60 to 75 days or more from application.
Yes. The builder's contract, plans, and budget are part of the loan package.
Not on one-time close programs. A licensed builder must act as the general contractor.
In California, permits are typically required before a one-time close loan closes. Conventional one-time close commonly requires permits before the first draw.
On FHA and VA one-time close, in most cases no, because the builder pays interim interest built into the contract price.
Land equity may help, depending on program guidelines.
Site-built and modular homes are generally eligible; multi-section manufactured homes may be eligible with added requirements.
Schedule a call or introduce the buyer by email, ideally before the lot offer is written.
In every state where PRMG is licensed, which is all states except New York.
Guidelines change. Verify current program requirements with Ken Clark Jr. before relying on them for a transaction.
Disclaimer: This content is for educational purposes only and is not a commitment to lend, a guarantee of approval, or a rate quote. Loan programs, down payment requirements, terms, and eligibility depend on borrower, property, project, builder, and program qualifications, are subject to underwriting, and vary by state. Not all applicants or projects will qualify. Builder registration is a documentation review for program eligibility and is not an endorsement of any builder. Equal Housing Opportunity. Paramount Residential Mortgage Group, Inc. (PRMG), NMLS #75243. Ken Clark Jr., NMLS #225375. PRMG is licensed in 49 states, excluding New York.
Certified Mortgage Advisor and Branch Manager at PRMG Mortgage (NMLS #75243). 28 years in mortgage lending. Specializes in FHA, VA, conventional, DPA, jumbo, Non-QM, renovation, and construction financing for buyers and investors in Sacramento, New Jersey, and nationwide. PRMG is licensed in 49 states, excluding New York. Three-time Gold Award winner for Highly Reviewed Mortgage Team in Sacramento (2023, 2024, 2025). NMLS #225375.
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