One-Time-Close Construction Loans
You Build your Dreams. We’ll Finance them.
What is a Construction Loan?
A construction loan is a special purpose loan that can be used to finance the purchase of land and construction costs (labor and materials) to build a new home.
Types of Construction Loan
There are two main types of construction loan: “Standalone” and One-Time-Close construction loans.
Standalone Construction Loans
Standalone construction loans are typically short-term loans that need be refinanced with regular financing after the construction has been completed. Because of this, they require two loans, two applications, two approvals, two sets of closing costs. And twice the effort and stress. They also involve rate uncertainty, leading to exposure to rate movements or long, costly locks.
One-Time-Close Construction (OTC) Loans
The benefit of a OTC loan is simply that. You close once, which means much lower total closing costs, less effort and less hassle, the other tangible benefit is that the rate is locked before closing and has an automatic float-down feature if rates improve. The automatic float-down feature protects the borrower from rising rates, while allowing the upside if rates were to fall.
Compare our One-Time-Close (OTC) loan with the traditional standalone construction loan. Click the button to initiate your approval process now.
What if I already own my land?
Prospective home owners that already own loan can still get a construction loan, however we treat this as a refinancing, not a purchase.
Does the land need to be undeveloped?
Homeowner-builders are not limited to acquiring undeveloped land, as tear-down new-construction development is also permitted. This opens a range of possibilities in more urban and sub-urban areas.
A simpler experience
Another benefit of Exhale Lending’s OTC loans is that it modifies into a standard conventional amortizing mortgage loan (or VA loan, for eligible borrowers) which means our lender utilizes Conventional and VA underwriting guidelines. This means lower-down payment requirements and an easier mortgage experience.
Exhale Lending can offer One-Time-Close Construction Loans as standard conventional loans with up to 95% financing, and VA loans with up to 100% financing, to eligible borrowers.
Here's how it works...
Pre-Closing
How much can you afford?
Work with Exhale Lending to establish your affordability and your budget. Click here to get approved.
Who and where?
Identify your builder and find your site. If you need help locating a realtor or builder, reach out to Exhale today. We may have some referrals for you.
Builder Approval
Once you have identified your builder, Exhale will work to get them approved through our Lender. It's best to start this as early as possible.
Time to Dream
Work with an architect and design your custom home, or choose a spec home from your builder's portfolio.
Project Approval
Once the builder is approved and a project outlined, we will work on getting your project approved, too.
Loan Approval
After both builder and project have been approved, we then submit your loan into underwriting for credit, income and asset approval. From here it's just like any other loan.
Rate Lock
Prior to closing, we'll lock the loan to ensure your future payments are within expectations.
Closing Time
Exhale will work on getting your loan approved and Clear-to-Close.
Post-Closing
Start paying your mortgage
You mortgage will need to be paid according to a schedule, and the amount will be based on a low Interest-Only payment, calculated using the locked interest rate and the outstanding drawn balance.
Construction Phases
As the builder completes certain phases of the construction more funds will be drawn from the account to cover labor and materials.
Site Visits
While all this is going on, you would be advised to make frequent site visits to ensure that work is progressing on time, and is being conducted to the highest of standards.
Certificate of Occupancy
Once the build is complete, the builder will obtain a Certificate of Occupancy to show that the work is done.
Loan Modification
On receipt of the Certificate of Occupancy, the lender will modify your loan from an Interest Only payment into a standard fixed rate Fannie Mae mortgage, or a VA loan for eligible borrowers.
Rate Protection
If rates at the time between project completion and the loan modification are lower then the original locked rate, your mortgage rate may be eligible for an automatic float down. If rates are higher, then your rate is already locked and safe.
Closing
Purchase the Land
As your OTC loan closes, portion of the funds set aside will be used to purchase the land upon which the home will be built. This is your first "Draw".
Note
If you already own the land, then we treat the project as a refinancing, not a purchase, but essentially works the same way.
Post-Construction / Modification
Get Living
Once the loan modification is complete, it's over to you get get living in your new dream home.
Refinance
Exhale will continue to monitor interest rates for you and will look for refinancing opportunities when the time comes. We do this for all our valued clients.
Eligibility Matrix
Conventional Loans
Contact Exhale Lending for more information.
When land is already owned by borrower, transaction will be treaded as a Cash Out (Type II) refinancing.
Also:
30 Year Fixed and 30 Year Jumbo Fixed
VA Loans
Contact Exhale Lending for more information.
PRIMARY RESIDENCE ONLY — 1 TO 4 UNITS
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Purpose Type
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Max LTV/CLTV/HCLTV
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Min FICO
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Base Loan Amount
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Exhale Lending’s OTC loans modify into conventional mortgages and therefore carry the same eligibility requirements. The only significant difference is the the minimum Credit Score (aka “FICO”) is floored at 700.
15 and 30 Year (Interest Only During Construction Period) Maximum 11 month Construction Period
Exhale Lending is a mortgage brokerage firm that embodies trust, transparency, and a genuine desire to help clients achieve financial serenity. With our client-centric approach, expertise, and unwavering commitment to excellence, Exhale Lending is poised to make a meaningful impact on the journey towards homeownership for individuals and families alike.
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Exhale Lending, L.L.C.
Equal Housing Opportunity
Office Location
Cary, NC 27511