A one-time close Construction/Permanent Program can help you build your dream home, your vacation home, or allow you to renovate your existing home.

With this program, the construction and permanent phases of home building are combined into one loan and one closing. A one-time application and closing result in a reduction of closing costs. There is also the assurance of permanent financing prior to construction and a guaranteed rate for 6 to 12-month period, which guards against rising interest rates during construction. In addition, financing is simplified with the ease of having both interim and permanent financing handled by one lender. We offer construction and permanent financing in one easy step!

Here is how it works:

Once you are approved for the program, we will assist you as you move forward to the construction loan closing. After the construction loan closing, your money will be released to pay off the land and you will start to build. You are not obligated to the full budget; your permanent mortgage will depend on how much money you have used over the construction loan period. Once you are near completion of the home, the mortgage lender will start working on your permanent loan. When the construction is complete, your construction loan will automatically roll into a 15, 20, or 30-year fixed rate mortgage, or other program that you’ve qualified for.

Our Construction-to-Permanent Loan is a one-time close loan. This means with one application, you get all the financing you need in one easy process.

• Convenience
  • One-time application, one-time close
  • One loan vs. two equals lower closing costs
• Up to 95% LTV
• Fixed Interest Rate during Construction
  • The borrower pays interest only during the construction period. The rate is typically fixed or based on the prime rate. The borrower may be able to deduct the interest. Check with your tax advisor.

What will I need for my construction loan request?

Remember, you’re asking the lender to loan money on your dream. Your lender will need to see that dream as clearly as you do. Therefore, in addition to standard credit documentation, your lender will want, at a minimum, copies of the following documents to start the process:

1. Final plans and specifications. These are needed for the appraiser to arrive at your “as completed” value.
2. Purchase & Sale Agreement on the land or your Settlement Statement if you have already bought the land.
3. A Detailed Specification Sheet which is a description of all the materials being used
4. A Line Item Cost Breakdown from the builder
5. Your Contract with the builder
6. A copy of the builders general contractor license and tax I.D. number
7. Building Permits
8. A copy of the Well and Septic Contracts (if applicable)
9. If the builder is not approved with the investor, we may need more information from the builder to verify financial strength.

If you enjoyed this post, make sure you subscribe to my RSS feed!