construction
One-Time-Close Construction Loans
Finance construction and your permanent mortgage in one closing — no second loan to qualify for once the home is done.
Eligibility
- For primary residences, second homes, and owner-occupied new construction
- Existing land equity can count toward your down payment
- Builder and project approval required before closing
Key benefits
- One application, one approval, one closing
- Only one set of closing costs
- Lock your permanent mortgage rate before construction begins
- No need to requalify for a second loan after the home is finished
What is a one-time-close construction loan?
A one-time-close construction loan — also called a construction-to-permanent loan — lets you finance building a new home and the permanent mortgage with a single loan and a single closing. Instead of taking one loan to build and a second to pay it off when the home is done, you handle both in one transaction.
Who it's for
Borrowers building a custom home who want to lock their permanent rate before groundbreaking, use existing land equity toward the down payment, and avoid the risk of requalifying for a second loan once construction is finished.
How it works
Loan funds are disbursed to your builder in stages — known as draws — as construction milestones are completed and inspected. You typically make interest-only payments during the build. Once the home receives its certificate of occupancy, the loan automatically converts into a permanent mortgage, with no second closing.
Frequently asked
- How is a one-time-close loan different from a regular construction loan?
- Traditional construction financing uses two loans and two closings — one to build, one to convert to a permanent mortgage. A one-time-close combines both into a single loan with one closing, so you lock your permanent rate up front and never requalify.
- What can a one-time-close construction loan cover?
- It can finance the lot purchase or payoff of an existing lot loan, construction costs, builder fees, approved contingency reserves, and interest reserves during the build, depending on the program.
- How are payments handled while the home is being built?
- Funds are released to your builder in stages, called draws, as milestones are completed and inspected. Borrowers typically make interest-only payments during construction; once the home is complete, the loan converts to a permanent mortgage automatically.