New Construction Loans
A One-Time Close New Construction loan is a single closing construction loan. The construction portion is short-term financing that is modified into permanent financing upon completion of the project. A single closing construction mortgage can be closed as a purchase or a refinance.
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What Is A Single Closing?
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A single closing construction loan is the combination of financing the construction and the permanent mortgage. There is a single closing transaction that occurs prior to construction beginning.
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Closing costs/fees that the borrower is responsible for are collected at closing. Funds are accessed through draws and there is an initial draw at closing for proceeds to the contractor to begin the construction project.
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Eligible for both Conventional and VA buyers
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Conventional Buyers: Interest only payments during build time
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VA Buyers: Zero payments during build time
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At closing, the cash is ready for all labor and materials
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Lender communicates and directs all draws made to the general contractor
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May be eligible for Interest Rate Float Down at time of permanent financing
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What Is A One-Time Close New Construction Purchase Loan?
The loan purpose is a purchase when the borrower is not the current owner of the lot on which the home will be built. The borrower is using the loan funds to purchase both the lot and to fund the construction of the property. The loan amount includes the sum of the sales price of the lot and the cost to construct the property minus the down payment.
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What is A One-Time Close New Construction Refinance Loan?
​The loan purpose is a refinance when the borrower already owns the lot in which the home will be built on. The borrower is using the loan funds to pay off any existing liens on the lot and to finance the construction of the home. The loan amount includes the sum of any existing financing from purchase of the lot and the cost to construct the home.