Construction-to-Permanent Loans

Program Overview

Construction-to-Permanent Loans provide one-time close financing for building your dream home. This program combines construction financing with permanent mortgage financing, eliminating the need for separate loans and multiple closings.

How It Works

Instead of getting a construction loan and then refinancing into a permanent mortgage, this program provides both in one transaction. You close once at the beginning, and the loan automatically converts to a permanent mortgage when construction is complete.

Key Benefits

• One-Time Close: Single closing saves time and money
• No Refinancing: Automatic conversion to permanent mortgage
• Interest-Only Payments: During construction, pay only interest on drawn amounts
• Competitive Rates: Lock in your permanent rate at closing
• Streamlined Process: Simplified underwriting and documentation

Program Requirements

Credit Requirements

• Minimum Credit Score: 720
• Credit History: Excellent credit history required
• Credit Inquiries: Limited recent inquiries preferred
• Payment History: No recent late payments

Project Requirements

• Detailed Plans: Complete architectural plans and specifications
• Construction Budget: Detailed cost breakdown and timeline
• Licensed Contractor: Experienced, licensed contractor required
• Property Ownership: Must own the land or purchase with construction
• Permits: All necessary building permits must be obtained

Income Requirements

• Stable Employment: Minimum 2 years of stable employment
• Income Verification: W-2s, pay stubs, or business documentation
• Income Stability: Demonstrated ability to maintain income
• Debt-to-Income: Maximum 43% DTI ratio

Property Requirements

• Property Types: Custom single-family homes, spec homes, luxury homes
• Location: All 50 states
• Land: Must own the land or purchase with construction
• Zoning: Must be zoned for residential construction

Down Payment Requirements

• Minimum Down Payment: 20%
• Source of Funds: Must be properly documented
• Gift Funds: Allowed with proper documentation
• Asset Verification: Down payment source must be verified

What to Expect

Step 1: Project Planning

We'll review your construction plans, budget, and timeline to ensure the project is feasible and properly planned. This includes analyzing costs, timeline, and contractor qualifications.

Step 2: Contractor Approval

We'll verify your contractor's credentials, experience, and financial stability. The contractor must be licensed, insured, and have experience with similar projects.

Step 3: Loan Application

Complete the one-time close application for both construction and permanent financing. We'll lock in your permanent rate at this time.

Step 4: Construction Phase

During construction, you'll make interest-only payments on the amount drawn. We'll conduct inspections and release funds as construction progresses.

Step 5: Conversion to Permanent

Upon completion and final inspection, the loan automatically converts to a permanent mortgage with your locked-in rate.

Who This Program Helps

• Custom home builders wanting to build their dream home
• Those with land who want to build rather than buy existing
• Luxury home buyers building high-end custom homes
• Barndominium builders creating unique living spaces
• Those wanting to avoid the hassle of separate construction and permanent loans