Construction-to-Permanent Conventional Loan
A construction-to-permanent conventional loan is a type of loan which allows you to build (basically funds the purchase of land and the home’s construction) or renovate your home.
When the construction process concludes, the loan rolls over into a traditional mortgage without you having to go through another closing. Also known as a one-time, single-close loan.
A Conventional Construction-to-Permanent loan is specifically used to finance the construction of the potential new home and permanent mortgage all into one single transaction with one closing.
A borrower will be approved for a Conventional Construction-to- Permanent loan if the borrower is qualified for the long-term permanent conventional mortgage
Upon completion of a construction the borrower will be required to modify from the interim construction loan into a permanent conventional fixed rate loan.
Construction-to-Permanent loan finances the construction of the home, then converts it to a mortgage upon completion.
Construction-to-Permanent loans only require one round of closing costs compared to a Construction-Only loans but require a down payment.
Construction-to-Permanent loan, you can draw funds at specific phases of construction, up to a certain loan amount.
Conventional Construction-to-Permanent loans can have fewer restrictions than Government-backed loans (FHA,VA)
Typically, the minimum Score required is 680, however, some Lenders want a 720 or better mid FICO score. However, some lenders may go as low as a 620 score.
Single Family Residence (SFR) – Primary/Secondary homes.
Loan amounts up to the Conventional Conforming and High Balance loan limits.
Cannot be owner/builder – borrow must be contracted with a licensed general contractor to construct the home.
