Loan programs · Florida, Ohio & Texas
Financing a house that does not exist yet
Available in Fort Myers, Cape Coral, Naples and across Florida · Dallas, Fort Worth, Houston, Austin, El Paso and across Texas · Columbus, Cleveland, Cincinnati and across Ohio
A construction loan funds the building of a new home, then converts into your permanent mortgage once the house is finished. I live inside one of the most active new-construction corridors in Lee County, and I work with builders directly, so this is not a program I read about. It is one I know from the ground up.
The version I use most is construction-to-permanent, sometimes called one-time close: a single loan, a single closing, and a single set of costs that carries you from a dirt lot to your front door.
The lender approves you, the builder and the plans together. That means a builder contract, a detailed budget, plans and specs, and a builder who can pass the lender’s review. The appraisal is based on the finished home as described in those documents.
During construction the money goes out in draws as each stage passes inspection, and you pay interest only on what has been drawn so far. When the certificate of occupancy is issued the loan converts to your permanent mortgage. On a one-time close there is no second closing and no second set of fees.
Buying a spec home a builder has already started, or one that is finished and sitting, is usually a normal purchase loan rather than a construction loan, and often the better deal. If you are a builder holding that inventory, see the builder page. If you are a buyer looking at it, we compare both paths.
One structure that carries you through the build and then becomes your mortgage, rather than two separate financings.
Interest-only payments while the house goes up, with the balance handled at completion or conversion.
Long lock terms are available on agency loans. Terms change, so ask me about current availability rather than assuming last year’s answer.
The lender approves the builder as well as the buyer. I work with builders across Lee and Charlotte counties and know what that review asks for.
Whether this is the right program depends on your situation, the property and current guidelines, which change. That is the conversation to have before you start looking, not after you have found the house.
Good fit
Look elsewhere
I’m a broker. If your loan doesn’t fit one lender’s box, I’m not out of options. I shop it. And when it fits everywhere, they compete for it.
Questions
One-time close is a single loan that covers construction and then converts to your permanent mortgage, with one closing. Two-time close is a construction loan followed by a separate permanent loan, with two closings and two sets of costs. I use one-time close whenever the program allows it.
No. The loan can include the land purchase. If you already own the lot, its equity can count toward your down payment.
Typically interest only, and only on the amount drawn so far. Your full principal and interest payment starts when the loan converts after completion.
Both programs have construction options, though fewer lenders offer them and the builder review is stricter. It is one of the situations where being a broker matters, because I know which lenders actually do them.
Yes. The lender reviews the builder’s license, insurance, experience and financial standing. Most established builders in Southwest Florida pass without trouble, and I can tell you early if one will not.
Not a commitment to lend. All loans subject to credit approval and underwriting on a complete file. Program availability and guidelines change, so confirm current terms before relying on them. Equal Housing Opportunity.
