Construction Perm Loan Process from Loan Application to Moving In

Building a home is a dream for so many, but keep in mind that in many ways there are many more steps compared to buying an existing home.  A construction loan process for stick built and modular homes has a lot moving pieces.  In addition, building a home has so many decision to make as well.  So after choosing a house plan, a popular question is, “How does the construction perm loan process work?”.

Construction Loan Process

First of all, it is a good idea to complete loan application and get preapproved.  Next, provide the required documentation to firm up a preapproval.  Knowing where you stand before going through too much of the building process is paramount.  Here are the basic steps when it comes to a construction and permanent loan.  There are additional steps which lenders and builders complete, but this gives a good idea of the process.

Construction loan process
VA, USDA, FHA, conventional construction to perm loans
  1. Builder approval or choose from approved builders
  2. Complete builder contract price
  3. Structure the loan amounts for construction plus permanent VA loan
  4. Loan terms disclosed and discussed
  5. Appraisal based on as completed value
  6. Submit for VA loan underwriting
  7. Clear all conditions per approval
  8. Submit for construction loan approval
  9. Construction loan closing
  10. Building commences

Once the house is nearing completion:

  1. Update income, asset, & credit documentation
  2. Lock interest rate for permanent loan
  3. Close permanent loan which pays off the construction loan
  4. Move into your brand new, never lived in home!

So keep in mind that these are not every single step and each scenario may be different.  But this gives a good idea of the process flow on a construction to perm loan.

For more details or to qualify for a construction perm loan, contact us today!

Team Move lends in areas such as Wilmington, Leland, Hampstead, Jacksonville, Camp Lejeune, Whiteville, Shallotte, Southport, Elizabethtown, Lumberton, Fort Bragg, Pope Air Force Base, Fayetteville, Rockingham, Raleigh, Garner, Smithfield, Clayton, Goldsboro, Charlotte, Greensboro, Winston-Salem, Durham, Chapel Hill, Burgaw, Castle Hayne, Holden Beach, Supply, Ocean Isle Beach, Sunset Beach, Hubert, Tabor City, Carolina Beach, Kure Beach, Laurinburg, Topsail Beach, North Topsail Beach, Surf City, Sneads Ferry, Richlands, Wrightsville Beach, New Bern, Oak Island, Saint James, Wallace, as well as the rest of NC.  North Myrtle Beach, Myrtle Beach, Conway, Loris, Little River, Longs, as well as the rest of South Carolina and Virginia.

Written By: Russell Smith