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Home » Construction Loan » Conforming Construction Loan

Conforming and Jumbo Construction Loans.

10% Down, 6% Seller Closing Credit Allowed

Yes you can build your own home as little as 10% down!

Conforming One-Time-Close/OTC/Single Close Construction Loan Program Benefits

  • The Conforming and Jumbo OTC Construction Loan program allows well qualified eligible borrowers to create one loan amount, to purchase a lot, provide interim construction financing, wrapped into one permanent loan with as little as a 10% down payment
  • Loans with a loan-to-value less than 70% will not need to requalify for a permanent loan, upon completion of the construction phase of the project
  • Minimum 10% down required, with gift funds allowed for non-jumbo construction projects
  • Safe, secure 30 Year fixed rate mortgage
  • With Builder/Retailer closing cost help, up to 6% of the construction costs, minimizing out-of-pocket closing costs
  • Tear-down and major renovation construction projects are eligible (12-month renovation time-frame allowed)
  • Most property types allowed

Conforming Construction Loan Qualification Requirements

  • Constructions must be completed within 12 months for a conforming loan limit and 24 months for a jumbo loan limit
  • A third-party Conforming Approved Builder must be selected for the project
  • All borrowers on the loan must have a minimum 700 middle credit score for a conforming loan limit and 720 middle credit score for a jumbo loan limit
  • Subordinate financing not allowed
  • No manual Underwrite. Loan approval level must be an:
    • Approve/Eligible for Conforming and High Balance Loan limits
    • Approve/Ineligible for Jumbo Loan limits, with a maximum debt-to-income ratio of 40%

Everyone Wins with a Conforming One-Time-Close Loan:

  • Borrowers:
    • With a Conforming OTC Loan, unlike a traditional two-step construction loan, the borrower doesn’t need to re-qualify for the “take-out” loan upon completion of the construction
    • With a typical two-time construction loan, the borrower must qualify for the construction loan, the take-out loan, and when the home is almost completed as the original borrower documentation and credit reports have expired
    • With a Conforming OTC Loan, unlike a traditional Construction-To-Perm loan, borrowers eliminate the cost of refinancing their interim financing loan
    • Interest rate is locked prior to the loan closing, for the life of the loan; thus, eliminating interest rate risk
    • During the construction process the borrower is only responsible for making interest only payments on the loan, which has an interest rate as low as .50% over the note rate
    • The loan is fully in place prior to construction
    • Upon completion of the construction project the loan is modified to a fully amortized principal and interest payment over 15 or 30 years
  • Contractors, Builders, Retailers:
    • Obtain the security of knowing that the borrower’s permanent loan will not only be approved, but is closed on prior to starting construction
    • The Builder/Retailer can obtain staged funded draws without having to draw on their own credit lines, thus eliminating their interest costs
    • Based on the scope of the project builders can obtain between 3 to 12 draws during the construction process
    • Builders no longer use their credit lines to fund a construction project

Today's Conforming and Jumbo Construction Loan Interest Rates

Conforming and Jumbo Construction Loan Interest rates change on a daily basis.


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