Single Close Construction Overview

Benefits for You

A single close transaction with no re-qualification after completion and no second closing with additional closing costs.

 Available for single-family, primary residence and second homes

 Permanent financing guaranteed up-front for you

 Low down payment options available

 Fannie Mae, FHA and VA loan products available

 Available for manufactured, modular, or a stick-built homes

 Build your dream home on your land

What is a Single Close Construction to Permanent Loan?

A Single Close Construction to Permanent loan is a home mortgage that can be used to close both the construction loan and permanent financing of a new home at the same time. They are sometimes referred to as “construction to perm”, “single close”, “one time close”, “construction conversion,” “CTP”, or even “all in one” loans.

How Does a Single Close Construction Loan Work?

The Single Close Construction loan offers both the interim construction loan and the permanent 30-year loan under one promissory note and one deed of trust with a single loan closing.

You would sign a 30 year amortizing promissory note at closing. At this time, any land liens will be paid off in addition to a first draw amount for the builder to begin construction. Upon completion of construction, the loan modification to amend the first payment date will be sent to you for your signature.

How Does It Work?

After loan closing, our construction management team will handle the construction administration including draw requests and inspections. They will follow the project through completion. You will need to sign off on final draw.

Why A Single Close Construction To Permanent Loan?

1. YOU ONLY NEED TO QUALIFY ONCE

Traditional construction loans require you to qualify up to three times — once for the construction loan, once for the permanent “take-out” loan to prove that they can pay off the construction loan and then again a year later when the house is actually complete due to expiration of original loan approval and documentation. With our single close construction toperm loan, you will not have to re-qualify when the homes is completed.

2. SINGLE CLOSE QUALIFICATION PROCESS REDUCES RISK

There is an element of risk in a traditional construction transaction if you have to re-qualify at completion. If circumstances prevent you from being able to qualify for a new permanent loan, you might be unable to pay off the construction loan at maturity and could be forced into a loan workout or even lose the house in a foreclosure action. This element of risk is eliminated by a Single Close Construction loan.

3. FIXED INTEREST RATES

With the Single Close Construction loan, the interest rate during construction is predetermined as is the interest rate of the converted permanent loan.

4. REDUCED CLOSING COSTS

Mortgage loan closing costs can be a significant expense - usually 3% to 4% of the loan amount. Closing one loan instead of two can save you thousands of dollars.

5. SINGLE APPRAISAL VALUATION ELIMINATES SURPRISES

The Single Close Construction loan usually only requires one appraisal prior to closing the loan. No second appraisal when the home is completed.

Frequently Asked Questions

1. DO I PAY ANYTHING DURING THE PROCESS?

For government loans (FHA and VA) you do not have to make a payment until after the construction is complete. For conventional loans (Fannie Mae) you are required to make interest only payments on the drawn balance during the construction phase.

2. HOW MUCH ARE THE CLOSING COSTS?

This depends on your unique situation and the amount of the loan you take out to build a home.

3. HOW LONG DOES IT TAKE TO BUILD A HOUSE?

This can vary due to a wide variety of circumstances such as the type of home, size and builder schedule.

4. CAN YOU HELP ME FIND A BUILDER?

Yes. If your builder is not currently approved, or you don’t have one, just let us know and we will be happy to assist and provide options of builders in your area. GSF Mortgage Corporation has more than 60 builders approved nationwide.

5. CAN I DO ANY OF THE WORK MYSELF?

No. Your builder must complete the work. Furthermore, these loans are not intended for investment and/or spec homes.

6. IF I ALREADY OWN THE LAND, CAN I STILL GET A LOAN?

Yes. If you already own the lot you may be able to use the equity toward down payment and closing costs.

7. IF I DON’T OWN THE LAND, CAN I STILL GET A LOAN?

Yes. The purchase of the land could be incorporated into the same transaction and thus, would be acquired at the one and only closing.

8. CAN MY LAND BE A GIFT? IF SO, HOW LONG DO I HAVE TO OWN IT?

Yes, at least 6 months in most cases in order to use appraised value.

9. WE WOULD LIKE TO TEAR DOWN AND REMOVE AN OLDER HOME FROM OUR PROPERTY AND REPLACE IT WITH A NEW HOME. IS THIS ALLOWED?

Yes, however, please consult with your loan officer as every loan can have different circumstances. Tear downs and rebuilds not allowed for Fannie Mae (FNMA) loans.