How it works
How a construction-to-permanent loan works
Most construction financing takes two loans: one to build, then a second mortgage when the house is done. That means two applications, two approvals and two closings. A construction-to-permanent loan, also called a one-time close loan, does both jobs with one.
Stage 1
Apply and close once
You apply once, and we review you, your builder and your plans together. When you're approved, you close one time. That closing covers the build and your long-term mortgage.
Stage 2
Build, with draws paid to your builder
A draw is a payment to your builder for a finished stage of work. Your builder sets a draw schedule before work starts. As each stage is finished, the work is verified and the draw is paid directly to the builder. Neil's team runs the draws in-house, from the first to the last.
While you build, your payments are interest-only for 12 or 18 months, depending on your builder's construction schedule.
Stage 3
Move in and settle into your mortgage
When construction is finished, the loan converts to a long-term principal-and-interest adjustable-rate mortgage. There's no second application and no second closing.
You choose the adjustable-rate option that fits you:
- 3/1: the rate is fixed for the first 3 years, then adjusts once a year.
- 5/1: fixed for the first 5 years, then adjusts once a year.
- 10/1: fixed for the first 10 years, then adjusts once a year.
How much you can borrow
Based on the finished home
Up to 80% of the home's value once it's built, depending on how you'll use the home, your borrower profile and the loan size. Loans start at $250,000 and go to $10 million and up.
Talk to Neil
Have a lot or a builder in mind?
Call Neil, and we'll walk through your build stage by stage.
- You call or send the formWe'll ask where you're building, whether you own the land and your timeline.
- We look at your buildYour lot, your builder and your plans, together.
- You get a straight answerWhat it takes to close, and what happens next.