How a one-time close construction loan works
A one-time close loan, also called a construction-to-permanent loan, combines two loans into one. At closing, the loan pays off or purchases your lot and sets aside the construction budget. During the build, your builder requests draws as each stage is finished, and an inspector confirms the work before money is released. You typically make interest-only payments on the amount drawn so far. When the home receives its certificate of occupancy, the loan converts to a regular 15- or 30-year mortgage with no second closing.
One-time close vs. two-time close
A two-time close uses a short-term construction loan, then a separate mortgage when the house is done. That means two applications, two sets of closing costs, and the risk that rates or your finances change before the second loan. A one-time close removes that risk. A two-time close can still make sense for some builders or unusual projects, and Greg will walk you through both.
What you need to get started
- A licensed Arizona general contractor and a signed construction contract
- Plans, specifications, and a line-item budget
- The lot address or parcel number (APN), or the lot you're buying
- Income, asset, and credit documents, the same as a purchase loan
Greg reviews the builder, budget, and timeline with you before you commit, so the appraisal and draw schedule line up with your build.
Loan options for Arizona builds
Construction-to-permanent financing is available on conventional, FHA, VA, and jumbo programs. FHA and VA one-time close options can mean a lower down payment for eligible buyers, while conventional and jumbo programs fit custom homes and higher budgets. Program availability varies by lender. As a broker with Barrett Financial Group, Greg compares lenders to find one that fits your build.
Building on land you already own
If you already own your lot, its equity can often count toward your down payment. Bring your purchase date and price, and any existing lot loan payoff, and Greg will show you how it factors in.
Frequently asked questions
How much do I need to put down on a construction loan in Arizona?
It depends on the program. Conventional construction loans commonly require more down than a standard purchase, while FHA and VA one-time close programs can require much less for eligible borrowers. Equity in a lot you own can count toward it.
Can I be my own builder?
Most construction loan programs require a licensed general contractor. Owner-builder financing is limited and usually needs a larger down payment and builder experience.
How long does an Arizona construction loan last?
Construction periods are commonly set at 9 to 12 months, with extensions available on many programs. Greg helps you choose a timeline that matches your builder's schedule.
Do I make payments while the house is being built?
On most one-time close loans you make interest-only payments on the amount drawn so far, so payments start small and grow as the build progresses.
Information is general and current as of November 2026. Program availability, terms, and limits change; Greg confirms what applies to you.