Looking to build a new home for your family? Primary Residential Mortgage has some of best construction products in the industry. Not only do our loan consultants have access to the products, they are also experts in the products. Give us a call today to get started on your construction loan!
One-Time Construction to Perm
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The McKnight Team @ PRMI specializes in offering True FHA, VA, USDA, and Conventional One-Time Close Construction-to-Permanent Loans. These programs are nearly identical to regular FHA, VA, USDA, and Conventional loans—with one key difference: the home hasn’t been built yet.
Program Benefits:
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Single Loan Convenience: Combine the home and land purchase into one loan with:
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FHA: 3.5% down payment
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VA & USDA: 0% down payment
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Conventional: 5% down payment
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Land Equity Options: No money down if you have sufficient land equity.
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Gift Flexibility: 100% of the down payment and/or closing costs can be covered by gifts, either as cash or land equity.
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Credit-Friendly: FICO scores as low as 620 are accepted on our government products(FHA,VA,USDA); 700 Minimum on Conventional
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Flexible Underwriting: Government loans provide easier qualification compared to conventional loans, including higher debt-to-income (DTI) ratios, shortened seasoning periods after foreclosure and bankruptcy.
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Deferred Payments: No payments are due until construction is complete.
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Simplified Qualification: No need to re-qualify once the home is finished.
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Versatile Housing Options: Eligible for site-built, modular, or manufactured homes.
Builder Benefits:
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Reduced Risk: Builders face no risk of borrowers failing to qualify once the home is complete.
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Streamlined Funding: A line-item percentage-of-completion draw schedule ensures steady, predictable payments during construction.
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Once construction is complete, all that’s required are a few modification documents to transition the loan from the construction phase to the permanent repayment phase. After that, you’re ready to move into your brand-new home!
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Are there size requirements for the home or land?We do not impose size restrictions; however, appraisal requirements necessitate comparable sales in the area. For example, a 2,500 sq. ft., 3-bedroom, 2-bath home on 5 acres must be compared to similar properties sold in the past year within the same area.
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Do you offer lot/land loans?No, we do not offer standalone lot/land loans. You may consider local banks for property-only purchases. We can assist if you want to combine the land purchase with your construction loan or build on land you already own.
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Can I build a multi-family home?Multi-family homes are considered on a case-by-case basis.
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Can I build a barndominium?We do allow for barndominium builds on a case-by-case basis. When registering the builder we require a builder that has built previous barndominiums and has experience in this type of build.
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What should I know about the appraisal process?Appraisals are required and based on provided plans, specifications, and comparable home sales in the area. Homes must align with similar properties in size and description for proper valuation.
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Can I or a family member be the builder?No, buyers cannot act as their own builder. Additionally, family members cannot serve as the builder due to the "arm’s length" relationship requirement.
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What should I consider when choosing a builder?Seek recommendations from trusted sources, check references through organizations like the BBB or local Home Builders Associations, and ensure the builder is licensed, insured, and financially sound. Compatibility and trust are critical as you'll work closely together during the project.
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Can you provide a list of registered builders in my area?We do not provide builder referrals. However, we can guide you to resources for finding a suitable builder.
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Is the equity in my land considered?Yes, land equity is considered as additional collateral, reducing your loan-to-value ratio. In some cases, it can eliminate the need for an out-of-pocket down payment.
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Can I use equity in my current home for the down payment?No, equity in your current home cannot be applied toward the down payment for purchasing new property or constructing a new home.
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Is down payment assistance available with this program?No, down payment assistance is not available for One-Time Close Construction programs.
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Is there a minimum/maximum loan amount?We do not have a minimum loan amount for this program. The maximum loan amount depends on factors like the borrower’s qualifications and the loan type. For FHA loans, the county loan limits are set by HUD. For VA loans, we can lend up to $1 million, with case-by-case exceptions up to $2 million.
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How soon can I start construction after applying?Construction can only begin after the loan has closed.
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Does the one-time close process take longer than a regular purchase loan?Yes, One-Time Close (OTC) loans require more steps and documentation compared to standard home purchase loans. Delays often occur due to the search for land and a builder, home planning and design, or obtaining necessary documentation from your builder. However, we strive to complete your loan as quickly as possible.
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If I already own a home, can I keep it, build a new home, and then sell my current one?It depends. Key factors include the type of your current home loan and your ability to qualify for both your current and new home payments.
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Is the pre-qualification a hard or soft credit pull?Once you submit your application, our system will perform a hard credit pull. This is necessary to gather all the required information for proper qualification.
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What is the minimum credit score for this program?The minimum credit score is 620 for PRMI's One-Time Close Construction Programs. Although we can make case-by-case exceptions based on compensating factors.
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Do I need plans and a builder before getting pre-qualified?No. You can get pre-qualified first, and we’ll help you set a budget for shopping for a builder and property. However, having a builder and plans ready may help expedite the process.
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Can I have a co-borrower on the loan if we aren’t married?FHA loans allow for co-borrowers (both occupying and non-occupying). USDA loans require all borrowers to occupy the property as their primary residence. VA loans only allow co-borrowers who are spouses or other VA-eligible individuals also planning to occupy the property. There are cases where VA does allow for joint loans, but please discuss with Austin McKnight if this could apply for your scenario.
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Can I use my credit score and my spouse’s income without pulling their credit?No. If there is a co-borrower on the loan, we must evaluate their credit, liabilities, income, and assets. Community Property states also require consideration of both spouses’ debts, regardless of loan involvement.