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- Construction Loans -

Construction to Permanent Loan

Often, getting approved for a construction loan can be tricky. In many cases, two loans are required - one for construction and one for permanent financing. Usually you will have to pay closing costs on both loans, not to mention the extra paperwork, time and hassle involved. But we offer a single-close Construction-to-Permanent Loan that combines both construction and permanent financing into one loan.

Our Construction-to-Permanent Loan allows for a construction period of 6 to12 months. Other options are also available. And when your project is complete, the loan simply converts to a permanent mortgage.

Download our free 28 page Construction Loan booklet (pdf)

Construction Loans FAQ

Q. Besides obtaining a Construction to Permanent loan, what other costs may be associated with the construction of my home?

A. In addition to the contract price, it is common for a construction lender to build a contingency reserve into the loan. This is a specified percentage or dollar amount usually required by the lender in case of unforeseen circumstances that could negatively impact the construction of your home. The amount required is usually based on a percentage of the contract price, on-site costs or loan amount.
Additional costs will vary, and may include construction loan closing costs and fees and special insurance requirements. Our Construction-to-Permanent Loan includes on-site costs, off-site costs, closing costs, interest reserve, contingency reserve and lot purchase or value.


Q. What does the term "cost plus" mean? If I contract for work to be done, doesn't it automatically mean that everything is covered?

A. Not always. Some contracts are referred to as "cost plus" because they guarantee the price only for the contractor's supervision of the job and may exclude a portion of the costs for materials and labor. Other contractors may cover both labor and materials but include a clause that permits the contractor to charge more if there are material shortage or increases in costs. You will want to clearly define with your contractor what is covered and is not covered.


Q. When will I have to make loan payments?

A. Our Construction-to-Permanent Loan program includes an interest reserve, which means that you will not have any payments out of pocket during the construction period. We will incorporate an interest reserve account within the loan amount. Depending on how quickly you use your construction funds, there may be sufficient funds within the construction loan to carry you through the entire construction period. As each construction project is unique, you will need to discuss your options with your Construction Loan Specialist.


Q. Will the payments on my construction loan include principal and interest?

A. Not necessarily. You may have interest only payments until the house is completed. This means that interest is charged only on the amount of funds used. Interest on our Construction-to-Permanent Loan is charged based on the funds used. Payments are interest only during the construction period, converting to principal and interest payments upon completion of the home.


Q. What will my construction lender need in order to review my loan request?

A. You are asking the lender to loan money on your dream. Your lender will need to see that dream as clearly as you do. Therefore, in addition to standard credit documentation, your lender will want, at a minimum, copies of the following documents to start the process:

1. Final plans and specifications. These are needed in order to obtain an appraisal.
2. Purchase contract for the lot (or Settlement Statement if you've already purchased it)
3. Property profile (description of materials)
4. Line Item Cost Breakdown from the builder
5. Builder's construction contract
6. Copy of Builder's license
7. Builder's statement or application

Download our free 28 page Construction Loan booklet (pdf)

For more information regarding Construction-to-Permanent Loans please call us at 850.863.4423 or contact us on the web.


Lot/Land Loan

We offer Lot/Land loans with as little as 10% down.

Our Lot Loan is the right loan if you are looking to purchase a residential lot for future construction of a primary residence or second home. Once you have purchased the land, you will have time to design your new home and choose a contractor. As described above we also offer a Construction-to-Permanent Loan when you are ready to build.

Lot/Land Loans FAQ

Q. I've found the perfect location, but I'm not ready to build my dream home. Can I obtain financing for the land only?

A. Yes, you can obtain a Lot Loan. Typically, this is short-term financing for the purchase of a residential lot suited for future construction. This loan allows you time to select an architect, builder, and design your dream home. Our Lot Loan program allows you to finance up to 50 acres. And when you're ready to build, we offer a one-time close Construction-to-Permanent Loan.


Q. How do I know where I should build my home?

A. Location may be one of the most important factors to consider. Although many people have a geographic location in mind, some are open to alternatives. It's important to consider your lifestyle (and those you'll be living with) as well as the cost. If you're planning a family, schools will be important. If not, you may want to consider other factors such as proximity to work, or accessibility to the beach, the mountains or leisure activities.


Q. What is a "finished lot"?

A. A "finished lot" refers to a portion of land that already has road access and utilities in place to the lot boundary. Additionally, it has been approved by the city or county as a separate parcel of land on a parcel map.


Q. Can I buy a piece of land that is not a finished lot and save some money?

A. While it may be possible to purchase an unfinished lot, generally this is not advisable for an individual building their own home. The costs of bringing roads and utilities to the first lot in a new area are usually very high. Typically, the first person to build pays for others who will build later. There are land developers who specialize in preparing lots for building (this may include zoning and/or soils issues, as well as bringing roads and utilities to the site, and creating a building pad). Often, these lots are in a planned community.


Q. What do you mean by "planned community"? Aren't all communities planned?

A. No, many older communities were not planned; they evolved. Certainly, as a city has grown, plans have taken shape. But in many cases the nucleus of a community was started many years before the community or city planning existed. In many instances, it is this unplanned characteristic that gives a community its charm.
A planned community, in contrast, generally offers a specific style and certain amenities at a package price. Depending on the size and location of the community, these amenities may include greenbelts, landscaping, biking trials, swimming pools, even schools and shopping centers. Some amenities, such as the community pool and greenbelts, are paid for through a homeowners' association. Still others are design enhancements intended to encourage potential buyers to purchase in an area or to attract more commercial business.
Many of the more costly amenities included in a planned community may not be affordable for a homeowner on an individual basis. However, some of these amenities may not be important to you. After all, priorities, like lifestyle, vary. If you select a home in a planned community, you'll generally have a more structured community where decisions are made jointly rather than by the individual homeowner. These community decisions include individual home design and landscaping. While some homeowners may consider this an acceptable trade-off to ensure an attractive environment, others may consider it an infringement on their rights. It's important that you know how you feel before selecting the type of lot you want.


Q. Can tax bases differ within the same community?

A. Yes, they can. While some cities already have parks, schools, and streets, newer communities built within the same city may have special assessments that cover the costs to develop or maintain new or existing parks, schools, streets, etc. These assessments may be for a prescribed period of time or may continue indefinitely. A little research goes a long way. Here again, a good real estate agent or title company officer can often provide you with this information.

For more information regarding Lot/Land Loans
please call us at 850.863.4423 or contact us on the web.


Builder Spec Loans

 Here's some important information about the Spec Loans:
� 24/7 online draw request
� Financing up to 90% of total project cost
� Loans up to 80% LTV
� Loans up to $1.5M, No loan committee approval on loans less than $1M
� Up to 4 loans to the same Builder within the same subdivision, market or neighborhood
� Lot draws up to 60% of land value
� Land equity and pre-paid costs can be used as down payment
� No DTI ratio calculated
� Corporations, Partnerships and LLCs okay with personal guarantees by principal(s)

Download our free Owner Builder booklet (pdf)

For more information regarding Builder Spec Loans please call us at 850.863.4423 or contact us on the web.

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800.913.0321

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