What Is a One-Time Close FHA Construction Loan?
The FHA One-Time Close Construction Loan is one of the most flexible ways to finance building a home in New Hampshire. With a low down payment, a credit score requirement that’s more forgiving than conventional financing, and the ability to include manufactured homes, it opens the door for more NH buyers to build rather than buy.
You close once, your rate is set before construction begins, and when the home is complete the loan converts automatically to your permanent FHA mortgage. No second closing. No requalifying.
This loan is offered through Click n’ Close and originated through Bookend Lending LLC, your local NH mortgage broker.
At a Glance
| Loan Type | FHA (Government-backed) |
| Occupancy | Primary Residence only |
| Units | 1-unit single family |
| Min. Credit Score | 650 (with AUS approval) |
| Max LTV | 96.5% |
| Max Loan Amount | $541,287 in most NH counties; $589,950 in Hillsborough County; $962,550 in Rockingham & Strafford counties (2026 FHA limits) |
| Construction Term | Up to 12 months |
| Loan Term | 15 or 30 years, fixed rate |
| Down Payment Assistance | Not available on this program |
| Investment Properties | Not eligible |
| Manufactured Homes | Eligible (must be new, never occupied, doublewide or larger) |
| Mortgage Insurance | FHA MIP applies (upfront and annual) |
How It Works: Four Phases
Phase 1 — Get It All Together
This is where the real work happens — and where having the right guidance matters most. You’ll need to confirm you qualify for the loan, find a lot if you don’t already have one, select a builder, choose house plans, work through the specifications, and get a finalized bid from your builder.
Our Construction Resource Center offers tips and tools to help you navigate this early stage. And feel free to reach out to Renée Duval directly — she’s guided many NH borrowers through the construction process and can help you understand what to expect before you ever formally apply.
Phase 2 — Close Once
Your credit is underwritten, the builder is approved, and both your construction and permanent loan terms are set before you sign a single document. You close one time. The lot is paid off at closing. Lot equity can be used toward your down payment and closing costs.
One important note specific to FHA: the construction interest, soft costs, and builder concessions must all be factored into the final contract price before the appraisal is ordered. The appraisal cannot be ordered until the OTC Calculation Form is complete and a contract addendum reflecting the final price has been executed. This is a critical sequencing step — get it right and the process flows smoothly.
Phase 3 — Construction Draws
Once closed, your builder requests draws through Trinity Loan Administration as work is completed. Funds are never advanced for materials — only for completed work. Up to 5 draws are included for site-built homes (3 draws for manufactured/modular). Additional draws are available at $295 each. An independent inspector confirms progress before each draw is released. Funds are typically wired to the builder within 24 hours of approval.
Phase 4 — Conversion
When construction is complete, a final inspection is done, title is updated, and your loan automatically converts to your permanent FHA mortgage. Your first full principal and interest payment begins the month after conversion. Escrows for taxes and insurance are collected at closing and activated at modification.
What You Pay During Construction
With the FHA OTC, construction interest accrues only on funds actually disbursed — not on the full loan amount. Construction interest can be financed into the loan and included in the builder’s contract price — which means it doesn’t have to come out of your pocket during the build. However, this needs to be structured that way from the beginning and will affect the total loan amount. Your escrow account for taxes and insurance is established at closing, so those amounts are collected monthly from day one.
You are not responsible for making full principal and interest payments until after construction is complete and the loan converts to permanent financing.
Your Rate
Your permanent rate is locked at closing. The initial rate is higher than the going rate for a regular purchase loan. However, within 30 days of closing you can float down to market rate (plus 0.25%). So if rates stay the same or even go up a little during construction, you will benefit from a lower final rate.
Rates are based on either a 6-month, 9-month, or 12-month construction period. The longer the construction period, the higher the rate. But it’s important to be realistic because repricing an expired rate can be expensive, especially if rates have gone up.
What Homes Qualify
Eligible: Site-built homes, modular homes, manufactured homes (new, never occupied, doublewide or larger), and panelized homes (treated as site-built). Pre-starts considered on a case-by-case basis.
Not eligible: Log homes, metal homes, post-frame homes. No self-builds. No 2–4 unit properties. No investment properties.
FHA Inspection Requirements
FHA new construction has specific inspection requirements that differ from conventional. How they are satisfied depends on whether your town has a local building inspector.
If your town has a local building inspector (which is the case in most NH municipalities): A building permit issued prior to the start of construction, plus a Certificate of Occupancy issued at completion, satisfies the FHA inspection requirement. Alternatively, three stage inspections — footing, framing, and final — performed by the local authority also work.
If your town does not have a local building inspector (which applies to some smaller NH towns): Three inspections (footing, framing, and final) must be performed by an ICC-certified Residential Combination Inspector (RCI) or Combination Inspector (CI). If no such inspector is available, a registered architect or structural engineer may perform the inspections.
It’s worth confirming your town’s inspection setup early — before construction begins — so there are no surprises at the finish line.
Builder Requirements
The builder must be registered and accepted by Click n’ Close before the loan can close. Builder approval typically takes 3–5 business days and is valid for 6 months.
In New Hampshire, general contractors are not licensed at the state level. However, the builder must demonstrate a track record of completed projects, carry the appropriate insurance, and be in good standing with suppliers and subcontractors. The borrower may not perform any of the construction work. Only one builder/contractor is allowed on this program.
The builder will need to provide:
- Current YTD Profit & Loss statement
- Prior year corporate tax return
- Most recent corporate bank statement
- Executive summary of company and principals’ experience
- Builder’s license(s) where applicable (retailer, installer, etc.)
- Certificate of General Liability Insurance (Acord 25 Form) — minimum $1,000,000 per occurrence, with Click n’ Close listed as certificate holder
- Builder’s Risk Insurance with Click n’ Close as certificate holder
- Fixed-price construction contract (no cost-plus contracts)
- Plans, specs, and elevations
- Line-item cost breakdown
- Plot plan
- Permit Advisory
- Form HUD-92541 — Builder’s Certification of Plans, Specifications, and Site (signed and dated no more than 30 days before the appraisal is ordered)
- Form HUD-92544 — Warranty of Completion of Construction (1-year warranty signed by builder and buyer at closing, covering defects in workmanship, materials, and mechanical systems)
- Signed FHA construction packet forms
Key Program Rules
- The loan amount cannot be increased after closing. Cost overruns are paid out of pocket by the borrower directly to the builder.
- No appraisal transfers — a fresh appraisal is required. The appraisal cannot be ordered until after the OTC Calculation Form is complete and the contract addendum is executed.
- No work may begin prior to closing — by the borrower or the builder.
- If construction extends beyond the locked term, the rate will reprice to current market.
- Cost-plus contracts are not allowed.
- A 10% contingency reserve is included and may be financed if supported by the appraisal.
- Weather holdbacks are permitted; holdbacks for non-weather incomplete items are not.
Program Fees (FHA OTC)
- CNC Admin Fee: $1,099
- 1% Construction Fee (on loan amount — financed into loan, not paid at closing)
- Construction Admin Fee: $750
- Feasibility Study: $195
- Draw Inspections: $295 per draw (up to 5 draws for site-built; 3 for manufactured/modular)
- Final Inspection: $250
- Title Update: $300 or actual cost
- Plus all typical fees associated with any mortgage loan
NH Site Considerations — Read This Before You Buy Land
Building in New Hampshire means thinking through your site before you ever sign a purchase contract. Here are the questions you need answered early.
Public water and sewer, or well and septic?
If your lot is not served by municipal water and sewer, you will need a private well and/or septic system. This is common across much of NH — rural towns, lakefront properties, and large parcels often rely entirely on private systems.
If you will need a septic system, the design must be approved by the NH Department of Environmental Services (NHDES) before the loan can close. Septic design approval is site-specific and can take time, so start this process early. You can find information on the NHDES subsurface program at des.nh.gov.
Well and septic placement matters.
If your lot will have both a private well and a septic system, the placement of all three — the well, the home, and the septic field — must comply with NH setback requirements. Wells must be a minimum distance from septic systems, property lines, and the home itself. Your plot plan must reflect these setbacks, and the lender will need a well and septic certification before the loan converts to permanent financing.
Road access.
The property must be accessible by a paved or all-weather road that meets local standards.
Important: No work — by the borrower or the builder — may begin prior to closing. Site clearing, grading, or any construction activity before closing will disqualify the project.
Ready to Build?
Bookend Lending LLC is your local NH mortgage broker for FHA One-Time Close construction financing. We’ll walk you through whether this program fits your land, your builder, and your timeline before you ever formally apply. Call us or get a quote to start the conversation.
Bookend Lending LLC, NMLS #2557411, is an independent mortgage broker licensed in New Hampshire. Construction financing offered through Click n’ Close, Inc. This is not a commitment to lend. All loans subject to borrower qualification, property review, and program availability. FHA loans are subject to FHA county loan limits, MIP requirements, and HUD guidelines. Programs and rates subject to change without notice.