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A construction-to-permanent loan — also known as a one-time, single-close or construction-perm loan — is a type of mortgage for those building a home. It funds the purchase of land and the ...
With a construction-to-permanent loan, you borrow money to pay for the cost of building your home. Once the house is complete and you move in, the loan is converted to a permanent mortgage.
If you'd rather build a home than buy one, and plan on borrowing to do so, your lender might steer you toward a construction loan. This would allow you to finance the building of the home; and ...
In this case, the gap lender is often the construction lender. Where the gap lender has agreed prior to construction to make the gap loan, the document that ties together the construction loan, the gap loan, and the permanent loan is the buy-sell agreement.
The rest of the loan's balance (called "holdback") [1] is given to the builder upon the achievement of certain milestones related to the sale or lease of its residential space. [2] For example, a bank may advance 80% of the balance of a property loan to the builder, and release the remaining 20% upon the successful construction lease or sale of ...
Permanent Funding: Mortgage lender does not have to draw deposits - the line of credit provides permanent funding for the life of all loans in the program. Less Risk: No margin calls - once the asset is funded, there is generally no additional mark-to-market and/or posting of additional collateral.