Features and Benefits

70% LTV with no requalification required post-construction

90% LTV option with requalification required post-construction

Loan amounts up to $424,100, or more in high balance areas

Rate can be locked at any time during the loan application/process

*Simple and flexible draw process with no set schedules

*Pay just interest-only payments during construction

*Consolidate construction and purchase for only one set of closing costs and fees

A one-closing construction loan combines the construction financing into the same loan as the permanent mortgage financing. There is a single closing transaction before construction begins where a single set of fees and closing costs are collected from the borrower. Once construction is complete, the loan will convert to the permanent phase and the borrower will begin making a traditional payments.

Loan Types and Terms

• 15-year conventional
• 30- year conventional

Eligible properties include:

• 1-unit site-built homes
• Planned Unit Developments (PUDs)
• Modular homes
• Site condominiums
• Rural properties

Glossary Of Terms

Change Orders
A change order is an official recognition of a change to the construction/renovation plans and specifications, and to the project budget

Construction Loan Disbursement Request/Authorization
This form is used to request a draw from the construction loan funds. It must be signed by both the borrower and the contractor. The approved budget must be referenced when completing this form, and the specific payees (subcontractor or supplier) who will be paid by the contractor must be identified. The form must be signed by both the borrower and the contractor.

Contingency Funds
Contingency funds are funds included in the construction/renovation budget to cover possible cost overruns and/or change orders. Contingency funds are common with renovation loans, but not as common with new construction. However, not all loans include a contingency fund.

Deposits
The lender will fund deposits on certain items that have been documented by an invoice. Deposits for which reimbursement is sought must be for custom and/or specialty items and are limited to 50% of the budget for the item.

Fees (Unused)
Any fees or portion of fees that are unused after the completion of construction or renovation (e.g., inspection fees, survey fees, title update fees) will be refunded to you within 30 days of conversion of a construction loan to the permanent phase or the closeout of the renovation escrow.

Final Draw
A minimum of 10% of the total construction hard costs must be held for the final draw. Final completion documentation will be required prior to the release of the remaining funds. Support documentation such as invoices and Unconditional Waiver of Liens for the previous draw must also accompany the final draw.

Funding Notification
A funding notification is a notice that funds have been disbursed following a draw request. Wire disbursements will receive an email with the confirmation number and amount. Funds disbursed by check will be notified via the next-day delivery of the check by UPS.

Line Item
A line item is a part of the construction budget that shows the amount budgeted to complete a particular component of the home.

Permits
A permit is an authorization from the local building authority to begin work on a construction project. It is also used by the building authority to identify properties in need of inspections during and after completion to ensure they were constructed according to applicable building codes. The permits for your project must be submitted to our Vendor no later than with the first draw request.

Site Inspection
A site inspection is an on-site review of the progress of construction/renovation by a local inspector in order to make a determination as to whether the work or materials for which draw funds have been requested has actually been completed or are on site. The loan administration Vendor will order a site inspection from a local inspector each time a draw request is received. An additional site inspection prior to releasing the final draw; this inspection will be made by the property appraiser to ensure the construction/renovation was completed as originally planned. Inspections typically will be conducted 24-48 hours after the Vendor receives the draw request. The local jurisdiction may also require inspections at various points during the construction or renovation process.

Standard Draw Requirements Letter
The Standard Draw Requirements Letter is a state-specific document which outlines the requirements for requesting a draw in the state(s) to which the letter applies. The top portion of the letter will specify the applicable state(s). It is important to reference the correct Standard Draw Requirements Letter for your state to avoid delays in processing draw requests.

Survey
A survey is a geographic mapping of your property boundary lines, setback lines, utility easements, etc. A survey is required for your project after the foundation is poured to confirm it was poured within the legal lot limits. For renovation loans, a survey is generally not required unless the footprint of the home is changed (e.g., due to an addition).