USDA Guaranteed Loan · One-Time Close Construction
USDA Construction Loan Calculator (One-Time Close)
Quick answer: A USDA One-Time Close construction loan rolls the lot, the build, a contingency reserve of up to 10%, a construction interest reserve and closing costs into one 30-year fixed loan with 100% financing, up to the home's appraised value as complete. The 1% upfront guarantee fee can be financed on top of that value, and a 0.35% annual fee is paid monthly (USDA fiscal year 2027). You bring cash only for costs above the appraised value.
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Dollar amounts start as examples; replace them with your lot price, builder contract and appraisal. Enter the interest rate from your lender to see your monthly payment.
Your lot
The loan can pay the lot's purchase price.
The build
Your builder's fixed-price contract, including site work such as well, septic and driveway.
USDA allows a contingency reserve of up to 10% of construction cost. Unused funds go to principal.
The appraiser's value of the finished home on its lot, from your plans and specifications.
The loan
Taxes, insurance & HOA
Enter the interest rate to see your payment
Estimates only — not a commitment to lend or a Loan Estimate. Jim Blackburn, NMLS #1072866.
How the USDA One-Time Close Construction Loan Works
USDA's Single Family Housing Guaranteed Loan Program includes a single-close construction-to-permanent option, which we call One-Time Close. You sign one set of loan documents before the build starts. The lender pays your builder in draws as work is inspected, and when the home is finished the same loan becomes your 30-year fixed-rate mortgage. There is no second closing, no second appraisal fee for a new loan and no requalifying after the house is built.
Because USDA issues its guarantee at the construction closing, the loan amount, rate and term are set up front. That is the main difference from a two-loan approach, where a short-term construction loan is refinanced into a mortgage once the home is complete.
What a USDA Construction Loan Can Finance
- The lot: the purchase price, or the payoff of what you still owe on land you already own.
- The build: your builder's fixed-price contract plus site costs such as wells, septic systems, driveways and landscaping.
- Soft costs: permits, inspections, surveys and lender construction administration.
- Contingency reserve: optional, up to 10% of construction cost. Anything unused is applied to principal when the home is complete.
- Interest or payment reserve: covers interest (or the full payment) during construction for up to 12 months, so you aren't paying out of pocket while the house is being built.
- Closing costs and the guarantee fee: closing costs can be included up to the appraised value, and the 1% upfront guarantee fee can be added on top of it.
Why the Appraisal Sets Your Cash to Close
The base loan can't be more than the home's appraised value as complete. The calculator adds up your lot, contract, contingency, interest reserve and closing costs, compares that total with the appraisal and shows the gap, if there is one, as cash to close.
Example: a $40,000 lot, a $280,000 contract, a 5% contingency ($14,000) and $7,000 in closing costs total $341,000 before any interest reserve. With a $345,000 appraisal, the whole amount fits under the value, so cash to close is $0. Financing the 1% guarantee fee brings the total loan to about $344,444. If the appraisal came in at $330,000 instead, you would bring $11,000 to closing.
USDA Guarantee Fee and Annual Fee for Fiscal Year 2027
USDA Rural Development set the fees for loans guaranteed from October 1, 2026 through September 30, 2027 at a 1.00% upfront guarantee fee and a 0.35% annual fee. The upfront fee is 1% of the total guaranteed loan, so when you finance it the total loan is the base loan divided by 0.99. The annual fee is charged on the average scheduled balance for each year and paid monthly with your mortgage payment; it falls a little each year as the scheduled balance goes down.
Who Qualifies: Property Location, Income and Builder
Two eligibility checks come first, and USDA publishes both on its official Income and Property Eligibility site: the lot must be in an eligible area on USDA's property map, and your household income must be at or below the limit for your county and household size. Income limits vary by county and change over time, so check the current figure there instead of relying on a number from another website.
Your builder also has to meet USDA's standards, which include at least two years of single-family construction experience, a state construction or contractor license, commercial general liability insurance and a fixed-price construction contract. Detached single-family homes, including modular and manufactured homes, are eligible; condominiums are not eligible for the single-close option.
Frequently Asked Questions
What is a USDA One-Time Close construction loan?
It is the single-close construction-to-permanent option of the USDA Single Family Housing Guaranteed Loan Program. One closing and one set of loan documents cover the construction phase and the 30-year fixed-rate mortgage that follows, so there is no second closing or refinance when the house is finished.
Does a USDA construction loan require a down payment?
No. USDA offers 100% financing: the loan can cover up to 100% of the home's appraised value as complete, plus the financed upfront guarantee fee. You bring cash only if your total project cost is more than the appraised value, or if you choose to pay the guarantee fee or other costs out of pocket.
What can a USDA construction loan pay for?
Eligible costs include buying the lot or paying off what you still owe on it, the construction contract, site costs such as wells, septic and driveways, permits, inspections and surveys, a contingency reserve of up to 10% of construction cost, an interest or payment reserve for up to 12 months, and closing costs, all within the appraised value.
What are the USDA guarantee fees on a USDA One-Time Close loan?
For USDA fiscal year 2027 (October 1, 2026 to September 30, 2027), the upfront guarantee fee is 1.00% and the annual fee is 0.35%, per USDA Rural Development's September 16, 2026 bulletin. The upfront fee can be added to the loan, and the annual fee is paid in monthly installments with your mortgage payment.
How does the appraisal affect a USDA construction loan?
The appraiser values the home as if it were already built, based on your plans, specifications and lot. The base loan cannot exceed that value. If the lot, build, reserves and closing costs add up to more than the appraised value, the difference is cash you bring to closing.
Who qualifies for a USDA construction loan?
The home must be in a USDA-eligible area, and your household income must be at or below the limit for your county and household size. Check both on USDA's official Income and Property Eligibility site. You also need a builder who meets USDA's requirements, including a fixed-price construction contract.
Can I use a USDA construction loan if I already own the lot?
Yes. A USDA One-Time Close loan can pay off the balance you still owe on the land. Your equity in the lot isn't borrowed, but it is part of the home's appraised value as complete, which can reduce or eliminate cash to close.
What loan term does a USDA construction loan have?
USDA guaranteed loans must be 30-year, fixed-rate, fully amortizing loans. Adjustable rates, balloon payments and shorter terms are not eligible under 7 CFR 3555.104.
Planning to Build With a USDA Loan?
Send us your lot details and your builder's contract and we'll check property eligibility, the appraisal gap and your cash to close on real numbers.
- Only 2 minutes to complete
- No credit score impact
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Important Disclaimer
This calculator illustrates the USDA Single Family Housing Guaranteed Loan single-close construction option using the numbers you enter. The interest reserve is a rough estimate that assumes the lot balance is outstanding for the whole build and construction draws average half the contract plus contingency; your lender's construction budget sets the actual reserve. Program figures were checked on October 30, 2026: the 1.00% upfront guarantee fee and 0.35% annual fee for fiscal year 2027 (USDA Rural Development SFH Guaranteed Origination bulletin, September 16, 2026); the maximum loan of 100% of appraised value plus the upfront guarantee fee and the 30-year fixed-rate term (7 CFR 3555.103 and 3555.104; HB-1-3555, Chapter 7); and single-close eligible costs, the 10% contingency limit and reserves of up to 12 months (HB-1-3555, Chapter 12; USDA Rural Development single-close training materials). Property and income eligibility are determined by USDA at eligibility.sc.egov.usda.gov. This is not a Loan Estimate, a rate quote, a loan approval or a commitment to lend. All borrowers, builders and properties must qualify under USDA and lender guidelines. Jim Blackburn, NMLS #1072866. Equal Housing Opportunity.