FHA Construction Loan Wisconsin – Build with Low Down Payment in 2025
FHA construction loan Wisconsin programs give homebuyers a flexible, low-down-payment way to build their dream home. Backed by the Federal Housing Administration, these loans combine construction financing and permanent FHA mortgage terms into one simple closing - known as an FHA One-Time Close.
For Wisconsin buyers who don't have 20% down or perfect credit, this program can make new construction more accessible in 2025 than ever before.
What Is an FHA Construction Loan?
An FHA Construction-to-Permanent (One-Time Close) loan allows you to finance both the cost of building your home and the long-term mortgage in a single transaction. Once the build is complete, the loan automatically converts into a standard FHA 30-year fixed mortgage.
Unlike traditional construction loans that require multiple closings, FHA streamlines the process, saving time, money, and stress.
Why Choose an FHA Construction Loan?
FHA construction loan Wisconsin options are perfect for buyers who want:
- Low down payment: As little as 3.5% down
- Flexible credit: FHA allows scores as low as 620 (and sometimes lower with strong compensating factors)
- One closing: You close once at the start of construction
- Stable long-term rates: Lock in a fixed rate upfront
- Lower reserve requirements: Less cash needed to qualify
This program is ideal for Wisconsin families who can afford monthly payments but need help with upfront costs or more flexible qualification guidelines.
Example: Real FHA Construction Savings
Let's say you're building a $400,000 home in Waukesha County in 2025.
With an FHA Construction-to-Permanent loan:
- Down payment (3.5%): $14,000
- Construction and permanent loan in one closing
- Fixed rate locked upfront (say 6.25%)
- Interest-only payments during construction
Once the home is complete, your loan automatically converts to your FHA fixed-rate mortgage - no second closing, no new underwriting.
FHA vs. Conventional Construction Loans
| Feature | FHA Construction Loan | Conventional Construction Loan |
|---|---|---|
| Minimum Down Payment | 3.5% | 5 - 20% |
| Credit Flexibility | 620+ | 680+ typical |
| Mortgage Insurance | Required | May not be required with 20% down |
| Eligible Borrowers | Primary residence only | Primary, vacation, or second homes |
| Appraisal | "As-completed" value | "As-completed" value |
| Closing | One-time close | Single or two-step options |
If your goal is to build a primary residence with minimal cash out of pocket, FHA's one-time-close program is the best fit.
Documents Needed to Apply
To start your FHA construction loan in Wisconsin, we'll need:
- Builder contract with plans/specifications
- Lot ownership info (owned or to be purchased)
- Pay stubs, W-2s, or tax returns
- Bank statements to verify funds
- Photo ID
Once your paperwork is in, we can typically close within about a week.
Wisconsin Builders Who Accept FHA Loans
Not all builders work with FHA financing - but many in Wisconsin do. My team partners with experienced local builders across Milwaukee, Waukesha, Dane, and Ozaukee Counties who are already approved for FHA construction projects.
That means you can choose your builder with confidence, knowing financing will align smoothly from start to finish.
Related Resources
- Internal Link: Construction-to-Permanent Loan Wisconsin - Build and Finance Your Dream Home in 2025
- External Link: HUD FHA One-Time Close Construction Loan Overview
Ready to Build Your FHA Dream Home?
If you've been waiting for the perfect time to build, now's your moment.
With today's rates and the FHA construction loan Wisconsin program, you can finance your build and permanent mortgage together with one easy closing.
Let's go over your plans, find your eligible builder, and get your FHA construction financing started today.
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Adam Zeman - NMLS #870441
Union Home Mortgage
Serving Milwaukee, Waukesha & all of Wisconsin
📞 414-975-2654
📧 azeman@uhm.com
🌐 www.mkemortgage.com
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