One-Time Construction Loans

A one-time close construction loan, sometimes called a construction-to-permanent loan, does two jobs under a single set of loan documents. During the build it funds the project in stages as work is completed, and when the home is finished it converts to a permanent mortgage without a second closing. The alternative, a short-term construction loan followed by a separate refinance, means qualifying twice, closing twice, and paying two sets of closing costs, so a single close is often the simpler path for a buyer building a primary residence.

During the construction phase the lender releases money in draws tied to inspected progress: foundation, framing, mechanical rough-in, and so on. Payments in that phase are typically interest only, and only on the amount actually drawn rather than the full loan. Once the home receives its certificate of occupancy and the final inspection clears, the loan modifies into the permanent term you selected up front and regular principal and interest payments begin.

Underwriting looks at more than you and your income. The lender reviews the builder's licensing, experience, and financial standing, the signed construction contract, the plans and specifications, the line-item budget, and the appraised value of the finished home based on those plans. Because so much rides on documents that do not exist yet when you start shopping for land, it helps to talk with us early, before you sign a builder contract, so the paperwork is structured in a way the loan can work with.