Home Construction

A "Construction To Permanent" home mortgage combines the financing for the construction with the permanent mortgage into one loan. This means the borrower has the convenience and cost savings of just one application and one closing for both the construction phase and the permanent mortgage. During the construction phase, the borrower typically makes interest-only payments based on the draw amounts disbursed for construction. Once the construction is complete, the loan automatically converts into a traditional mortgage.

Some things to consider on a One Time Close Construction to Permanent Mortgage…

What is the maximum Loan To Value/Loan To Cost on a purchase  or refinance scenario?

What are the additional construction related costs?

How long is the interest only construction phase?

Can the initial draw be taken right at the closing? How much?

Are the draws released to either the borrower or the builder?

How long does it take to fund a draw request?

Can a home construction project which has started still get funded and, if yes, up to what percent or phase of work completed?

What is the builder requirements?

Are draw requests & inspections handled in-house or through a third-party platform?

What type of insurance is needed during the construction phase?

How are real estate taxes estimated for qualifying purposes?

Will real estate taxes be escrowed when the construction loan converts to a mortgage?

Can the borrower be reimbursed for the purchase of specialty items like windows, doors, flooring, and cabinets?

If new appliances are not in the budget how is their cost estimated?

What happens if the project goes over budget after the loan closes?

What happens if the construction takes longer than planned?

What is the "hold back" amount for a Certificate of Occupancy?

Under what circumstances is a temporary C/O considered?

When will a signed contract, cost break down, Plans & Specs and permits be needed?

Is there a paperless e-doc process from application to closing?

Can the homeowner act as their general contractors?

 Is there a minimum renovation budget amount for a purchase or refinance?

What is the maximum units allowed e.g. 1-family, 2-family, 3-4 family?

Can a condominium renovation project get funded?

How is modular construction handled?

What happens if the project appraisal comes in less than expected?

How many appraisals are needed on large loan amounts?

Is there a "seasoning" requirement on recently acquired real estate?

What percent of current land value can be financed?

What is the maximum Loan to Value/Loan to Cost?

How are the reserve requirements calculated?

Can a recorded private mortgage be paid from the proceeds of of the loan?

In New York state will a CEMA be accepted?

  

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