Construction Loans One-Time Closing
What is a One-Time Close New Construction loan?
- 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.
What is a single closing?
- A single closing construction loan is the combination of financing of the construction and the permanent mortgage. There is a single closing transaction that occurs prior to construction beginning.
- Closing costs/fees that the borrower is responsible for are collected at closing. Funds are accessed through draws and there will be an initial draw at closing for proceeds to the contractor to begin the construction project.
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.
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 the any existing financing from purchase of the lot and the cost to construct the home.
LOAN PARAMETERS
CONVENTIONAL
- 15- and 30-year Fixed & 7/6 and 10/6 ARMs
- Conforming and High Balance loan limits
- Primary, second home and investment properties
- Min FICO = 700
- Max LTV/CLTV/HCLTV = 95%
VA
- 30-year Fixed & 30-year Jumbo
- Primary Residence Only
- Max Loan Amount = $4 million
- Total loan amount cannot exceed the total acquisition cost, including financed funding fee
- Min FICO = 620
- Max LTV/CLTV/HCLTV = 100%
- Funding fee based on total acquisition costs
- Borrowers cannot combine VA entitlement
- No rehab constructions – an existing property cannot be renovated using a One-Time Close New Construction loan
