Can you build a house with a conventional loan?
Yes. Fannie Mae and Freddie Mac both support construction-to-permanent financing, where a single conventional loan covers the construction phase and then becomes the permanent mortgage at completion, per the Fannie Mae Selling Guide. The finished loan is a normal conforming conventional loan, which means it follows the same conforming limits as any other: $832,750 for a one-unit home in most areas in 2026, higher in designated high-cost counties, per FHFA. A build whose final loan amount lands above the applicable limit is a jumbo construction scenario, a separate product.
The honest caveat isn't the guidelines; it's availability. Construction lending requires plan review, draw administration, and inspections that many lenders simply aren't set up to run, so plenty of borrowers get told "we don't do that" and assume it doesn't exist. It does. I originate conventional one-time close construction loans at Satori Mortgage, and the standard conventional qualification still applies: credit, income, assets, and the property itself, covered in the conventional loan requirements guide.
What is a one-time close construction loan?
It's the structure in the name: Construction-to-permanent single close: one closing covers the build and converts to a permanent conventional loan at completion. You qualify once, sign once, and pay one set of closing costs. The alternative, covered below, is closing twice.
During the build, the loan behaves like construction financing: funds sit in a disbursement account and go out to the builder in stages as work is completed and inspected. At completion, the loan converts to the permanent conventional mortgage you qualified for at the start. The fine print of that conversion, like the construction-period length and exactly how the permanent terms are set, varies by program, so I verify the current terms against the Selling Guides and the specific program before we structure your file, not after.
How does the one-time close process work?
Five stages: full approval, a single closing, builder draws with inspections during the build, completion, and conversion to the permanent conventional loan. Here's what each one actually involves.
- Approval. You're underwritten up front for the full picture: your credit and income, the builder's plans, specs, and budget, and the appraisal, which values the home based on what it will be when finished. This is standard conventional underwriting plus a construction-project review.
- One closing. You sign once, before ground breaks. Land you already own or are buying can typically be part of the same transaction, subject to program terms.
- Builder draws with inspections. Construction funds are disbursed to the builder in stages tied to completed work, with inspections verifying progress before each release. Builder approval requirements apply and construction funds are disbursed through inspected draws; conditions apply per program guidelines.
- Completion. The home is finished, final inspection is done, and the construction phase ends.
- Conversion. The loan converts to your permanent conventional mortgage without a second closing or a second set of closing costs.
What rates, terms, and limits does the program offer?
The one-time close program I work with offers 15- and 30-year fixed, plus 7/6 and 10/6 SOFR ARM, so you can take a fixed permanent rate or a SOFR ARM on the same single-close structure. During the build you pay interest only on the amount drawn, and at completion the loan converts to a principal-and-interest permanent mortgage. The construction period runs up to 11 months. These are current program parameters, subject to qualification and program guidelines, not a rate quote or a commitment to lend.
On loan size, the program works for builds whose final loan amount lands at or under your county's conforming limit, $832,750 for a one-unit home in most areas in 2026, and up to the $1,249,125 high-cost ceiling, per FHFA. A build whose final loan amount would exceed that ceiling is a jumbo (non-conforming) scenario, which this one-time close program does NOT cover. The jumbo loan limits page explains where conforming ends and jumbo begins, and why a high-balance loan in a high-cost county is still conforming, not jumbo.
What are the LTV and credit limits by occupancy and units?
The program sets its maximum loan-to-value and minimum credit by how you'll use the home and how many units it has. The table below is for purchase and rate-and-term refinance. It is a summary of current program parameters, subject to qualification and program guidelines; conditions apply.