One-time Close New Construction

• 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.
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• 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.

• 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.

General Terms:

• Construction Period – timeframe between the initial draw at closing to completion of the construction
  

• Initial Draw (Draw at Close) – amount of funds to be disbursed at closing

  • On a purchase transaction, funds from initial draw are used to purchase the lot and to pay the contractor to begin the project
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  • On a refinance transaction, funds may be used to pay off existing financing on the lot and to pay the contractor to begin the project
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  Draw Schedule – outline of the increments in which funds will be disbursed to the contractor in accordance with the construction contract

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