Single Family Construction To Perm Loans

What is the purpose of this program?

Assist builders in obtaining construction financing by allowing borrowers to be approved prior to start of construction.

Mortgage Amount

Determined the same as any other loan with mortgage based on the lesser of sales price or appraised value. Appraisal would be done from plans and specifications with a requirement for completion inspection. Builder must supply a HOW warranty policy in order for the borrower to obtain a loan to value in excess of 90%.

Closing

The loan would close in the name of the borrower prior to start of construction. Disbursement of Funds - Responsibility of the lender. Interest, commitment fees, inspection fees, hazard insurance, and other financing charges incurred during the construction period shall be the responsibility of the builder.

Amortization

Begin no later than the first day of the month following 60 days from the date of final inspection or certificate of occupancy.

Payment of Mortgage Insurance

Within 15 days of the date of closing.

Endorsement

Request for endorsement submitted by lender within 60 days from the date of final inspection or certificate of occupancy.

Documents

Loan closed using standard FHA documentation with the addition of a Construction Rider to the Note and a Construction Loan Agreement. The construction documents must contain a provision that the construction terms cease to be effective and the FHA terms become effective at the time of final inspection or certificate of occupancy.

Escrows for Taxes and Insurance

Established at the time of loan closing or at the time of final inspection or certificate of occupancy (lender option).

Builders

FHA approved builders only.