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Manny Oloyede | NMLS 1824463

Purchase pathway

Custom Home Construction

Building is a different transaction than buying. The loan has to cover land, construction draws and the permanent mortgage, and the appraisal is based on plans rather than an existing house. A one time close structure handles all of it in a single closing.

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Who this is for

  • Buyers building with a licensed general contractor
  • Buyers who own land or are purchasing it as part of the project
  • Buyers who want a single closing rather than construction and permanent loans separately

How the process works

  1. Select and qualify the builder

    The builder must be approved and supply license, insurance, references and a complete budget.

  2. Finalize plans and budget

    The appraisal is based on plans and specifications, so changes later can affect value and cost.

  3. Understand the draw schedule

    Funds are released in stages after inspections, and you make interest only payments on the disbursed balance during construction.

  4. Plan for conversion

    At completion the loan converts to permanent financing on the terms established at closing.

Common mistakes

  • Signing a builder contract before confirming the builder is approvable
  • Underestimating contingency for change orders and material cost changes
  • Planning a build timeline that exceeds the program's construction window

Loan programs that apply

Construction & Renovation

One Time Close Construction Loans

Build a custom home with a single closing that converts to permanent financing.

Learn more Construction & Renovation

Renovation Loans

Finance the purchase or refinance plus the improvements in one mortgage.

Learn more Core

Conventional Loans

The most widely used financing for primary homes, second homes and rentals.

Learn more Core

VA Loans

A benefit earned through service, with no required down payment for eligible buyers.

Learn more

Frequently Asked Questions

Land equity you already own commonly counts toward the required investment, based on the program's calculation of total project cost or completed value.

A single loan that funds construction and then converts to a permanent mortgage without a second closing, so you pay one set of closing costs. It is intended for eligible custom home construction scenarios.

You close before construction begins, the builder is paid in draws as work is completed, and at completion the loan converts to your permanent mortgage under the terms set at the original closing.

Not always. Land can often be purchased at the same closing, or land you already own can be brought into the transaction.

Frequently yes. If you already own the lot, its value may count toward the required equity, which can reduce the cash needed at closing.

Through scheduled draws tied to completed stages of work, released after inspection rather than in a lump sum up front.

The builder requests a draw, an inspection confirms the work, and funds are released. Interest during construction is generally charged only on the amount drawn.

Yes, based on the plans, specifications and cost breakdown to establish the completed value before closing.

At completion, when the loan converts to the permanent term and regular principal and interest payments start.

A construction loan builds a new home from the ground up. A renovation loan finances improvements to an existing home, either at purchase or on a home you already own. See the renovation loan page.

Ready for the next step?

We will review your documents and give you a preapproval you can use with confidence. Not a commitment to lend.

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