By Hans Fetterhoff, Mortgage Broker, NMLS# 273273 — Broker House Mortgage, Colorado Springs
Last verified: October 27, 2026
A One-Time Close construction loan is a single loan that covers the lot, the build, and your permanent mortgage — you qualify once, close once before construction starts, and the same loan converts to your regular mortgage when the home is finished. No second closing, and no requalifying at the end.
That structure matters more than it might sound. The traditional way to build a home takes two separate loans: a short-term construction loan to fund the build, then a brand-new mortgage after the home is done — which means a second application, a second underwriting, a second set of closing costs, and a second approval that depends on your job, your credit, and the market all still cooperating a year later. One-Time Close removes that second hurdle entirely. This page walks through how it works in El Paso County, what it costs in real dollars, and who it fits.
Ready to skip ahead? Call Hans at (719) 686-3652 or start your application online.
The loan closes before construction starts — that single fact drives everything else about the program. Here is the sequence we run:
Your home is appraised from your plans and specifications before closing, so the value is established up front, with a completion report at the end confirming the home was built as planned.
The program runs in two versions through our wholesale lending partners, and they fit different buyers:
Conventional One-Time Close
VA One-Time Close (for eligible Veterans, service members, and surviving spouses with VA entitlement)
Not sure which version fits, or whether your file belongs in a conventional loan instead? That's a ten-minute conversation — bring us the lot, the builder, or just the idea, and we'll map it.
The program allows a build period of up to 11 months, plus 1 month for the conversion to your permanent mortgage — 12 months total from closing to converted loan. Read that as a program limit, not a promise about your builder's schedule: weather, materials, inspections, and subcontractor availability all move real-world timelines, and your builder's contract is what governs the actual pace of your project.
Two timing details worth knowing:
During the build, you are not making full mortgage payments. On a conventional One-Time Close, you make interest-only payments on just the amount drawn so far — early in the build, when only the lot and foundation money is out, the interest is calculated on that smaller balance; it grows only as more of the home is built and funded. You are never paying interest on money that has not been released.
VA handles it differently, and it's one of the strongest VA features in the program: an interest reserve can be built into the construction budget, so the interest during the build is carried inside the project instead of coming out of your pocket monthly. The reserve is optional — if one is included, it must stay within 4% of the loan amount. If you leave it out, the program confirms with everyone involved that the choice was intentional, and you simply make the interest-only payments during the build yourself.
Regular principal-and-interest payments begin at conversion, on the finished home, in both versions.
A draw is a release of loan funds tied to a completed, inspected stage of work. Your money is never handed over in a lump sum — it moves as the home does.
This is the question every builder-buyer asks, and the honest answer has two parts. First: we are not quoting any rate here, because your rate is set by your file, your loan, and the market at the time you lock — anyone who quotes you a construction-loan rate in a web page is guessing with your money.
Second, the mechanism itself, which is genuinely consumer-friendly: your rate is established when you close, before construction. During the build, if market rates have improved by the time your home is complete, you get a one-time float-down at conversion — your rate can be lowered to reflect the better market. If rates have gone up during the build, your rate simply stays where it was locked. It can float down. It cannot float up. In a two-close loan, by contrast, your permanent mortgage doesn't even exist during the build — you take whatever the market gives you at the end, up or down, and you still have to qualify for it. That asymmetry is a big part of why buyers choose this program.
One closing instead of two already removes an entire second set of closing costs. On top of your normal one-time closing costs, the program carries a short list of specific fees. We'll show you every one of them, including when each is paid, because the timing is where construction loans surprise people:
| Fee | Amount | When it's paid |
|---|---|---|
| Project review fee | $425 | Paid by you up front, at the time of project review — before closing. It is not part of the financed budget |
| Underwriting fee | $1,690 | Paid at closing. Not in the budget |
| Final inspection and survey | $400 conventional / $150 VA | Paid at closing. Not in the budget |
| Construction draw fee | $195 per draw | Built into the project budget |
| Per-draw inspection fee | $125 per draw | Built into the project budget |
Only two fees live inside the financed budget: the draw fee and the inspection fee, $320 combined per draw. Everything else is paid separately, on the schedule above.
What that looks like in dollars (illustrative example — a $400,000 build with 8 draws, the standard schedule for that size; your project and draw count will differ):
The 5% contingency. Every project budget also includes a 5% contingency reserve for the surprises that building a house reliably produces. It's your cushion, not a fee: whatever contingency is not used reduces your loan balance at conversion. And a word of honest caution that protects you: if a budget turns out to be underestimated by more than the contingency, the difference comes out of pocket — which is why an honest, complete budget up front matters more than an optimistic one. Run your first-pass numbers on our mortgage calculators, then let us pressure-test the full budget with you before project review.
Both paths run through this same loan:
Either way, the sequencing rule is the same: talk to us before you sign. Builder approval and project approval start early, and getting them moving first is what keeps a build on schedule.
Your builder is approved once, and that approval is good for 12 months and can be reissued for a new buyer as long as the license and insurance stay current. The approval package is straightforward:
Initial builder review is targeted at about 1 business day in the program's published guidelines (longer if more information is needed). Then each project gets its own approval before the loan can reach clear-to-close — the signed construction contract, a cost breakdown matching the contract, a full set of plans and specifications, building permits, and any prepaid accounting. Project approval is targeted at about 3 business days. Those are the program's published review targets, not guarantees — complete packages move fast, incomplete ones don't, which is another reason to start before the contract is signed.
Two more builder-side facts that affect you as the buyer: a builder's risk policy (or a construction endorsement on a homeowner's policy) must be in place at closing, with coverage at least equal to the cost of construction — on VA projects, the builder pays that premium and it's included in the budget. And before the first draw, you and your builder sign a short Memorandum of Understanding confirming how disbursements work, so everyone runs the build by the same rules.
Yes — with paperwork, and this section saves people real money. Long-lead items tempt buyers to pay early: custom windows, building permits, the plans themselves. Those early payments are called prepaids, and they can count toward your project if they're documented the right way:
Prepaids are listed on the construction budget or a prepaid worksheet when your project is approved, so nothing you paid early gets lost. The rule that makes it work: call us before you pay. A two-minute call before the check goes out is the difference between getting full credit and getting a lesson.
Versus a two-close construction loan: two applications, two underwritings, two closings, two sets of closing costs — and the second approval happens after the build, when a job change, a credit slip, or a rate spike can damage or kill it. With One-Time Close, the approval that matters happens before the first shovel, the closing costs are paid once, and the float-down protects you on rate movement instead of exposing you to it. The trade-off is honesty-worthy too: your project and builder go through a formal approval up front, so the front end has more paperwork than a handshake construction loan. We think certainty is worth a thicker file. Most builders agree — they get a committed buyer with financing already closed before they start.
Versus a renovation loan:renovation loans fix or upgrade a home that already exists; One-Time Close builds a new home from the ground up. If you're buying an existing Colorado Springs home that needs work — or your current home needs a major remodel — that's the renovation path, and it has its own page: renovation loans. Not sure which one your project is? If there's a standing house at the center of the plan, it's renovation. If there's a lot and a set of plans, it's this page.
Colorado Springs keeps growing outward — new communities and scattered custom lots to the north and east of the city, infill lots in established neighborhoods, and acreage builds out toward Falcon, Fountain, and the county edges. Building here has local wrinkles a national call center won't walk you through: El Paso County permitting and inspections, metro-district tax structures in many of the newer communities (which change the true cost of the finished home, and which we check before you fall for a lot), and title-update milestones that run on Colorado's schedule.
The military angle is real here too. Between Fort Carson, Peterson Space Force Base, and Schriever Space Force Base, plenty of local builds are VA One-Time Close projects — a service member buying land and building the home they'll retire into, instead of buying someone else's compromise near the gate. VA construction lending is a specialty inside a specialty; not every lender offers it, and fewer still run it regularly.
What a local broker adds: we work with Colorado Springs builders every week, so the builder-approval and project-approval steps start with relationships instead of cold calls. And because we're a brokerage, we place your file with the wholesale lending partners whose programs fit it — the approval, the draws, and the conversion all run through one office you can walk into: 529 N Tejon St, downtown. Hans Fetterhoff has lived in Colorado Springs for over 20 years and has helped thousands of families into homes — including homes that started as a set of plans and a patch of dirt.
Thinking about building? The single most valuable move is the first conversation — before the builder contract, before the lot contract, before any prepaid check gets written:
You're Better Off With Fetterhoff.
By Hans Fetterhoff, Mortgage Broker, NMLS# 273273 — Broker House Mortgage
Educational information only — not a commitment to lend. All loans are subject to credit review, underwriting approval, builder and project approval, and property appraisal. Program terms, fee amounts, draw schedules, and limits shown were verified against Broker House Mortgage's program guides on October 27, 2026, and are program guidelines in effect at the time of application, which can change without notice; figures shown are program maximums and published targets, and your actual terms depend on your credit profile, the property, and final approvals. Confirm current terms when you apply.
Hans Fetterhoff | Mortgage Broker | CO License #100009597 | NMLS# 273273
Lender Works, LLP dba Broker House Mortgage | Company NMLS# 2002619
529 N Tejon St, Colorado Springs, CO 80903 | 719-686-3652 | brokerhousemortgage.com
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Equal Housing Opportunity
Verify licensing at NMLS Consumer Access: www.nmlsconsumeraccess.org
