A construction loan is unique financing that allows home owners the opportunity to finance the construction of a home, including if you own the land/home or if you are looking to acquire property.

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Unlike a traditional mortgage, construction financing works in two parts, the construction and the permanent phases.  The construction phase is sometimes called a “draw” and during this period, funds are advanced in order to pay for the construction of a new home, and the owner will make interest only payments.

Upon completion of the home the permanent loan will kick in where the construction loan modifies to a permanent mortgage, the phase that most are familiar with.  This type of financing is very common in the build of custom homes as it allows homeowners to work with builders in financing their project.


Features of a Construction to Permanent Loan

  • Known as a “one-time close” you get both the construction and permanent loan phase
  • Traditionally the loan is interest only during construction and fully amortizing upon completion
  • Your appraisal is completed “subject to” the completion of the home
  • The rate you lock in upfront is often times the same as your permanent loan rate
  • Significant transactional savings as compared to purchasing a turn key new home
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Preferred Lenders

We have searched for the most competitive construction-to-perm loan programs in the mortgage industry coupled with excellent service from experienced and qualified loan officers.

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