One-Time Close Construction Loan Process
1. Pre-Closing & Approval Phase
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Pre-qualification: Review your budget, income, and assets.
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Select a Builder: Builder will need to be approved by BOL.
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Submit Plans & Specs: You, your builder, and an appraiser will review blueprints, building specifications, and material costs to establish the future value of the finished home.
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Final Closing: Once underwriting is complete, you will sign one set of documents, lock in your interest rate, and pay closing costs.
2. Construction Phase
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The Draw Schedule: Instead of receiving all the loan funds at once, the money is released in stages (called "draws") as specific construction milestones are met (e.g., foundation, framing, roofing, interior finishing).
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Inspections: Before each draw is released, an inspector will visit the job site to verify that the work has been properly completed per the agreed plans.
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Interest-Only Payments: During the 6 to 12-month build timeline, you will typically make interest-only payments solely on the funds that have been disbursed so far.
3. Completion & Conversion
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Final Inspection & Occupancy: Once the home is finished, it undergoes a final inspection to ensure compliance with local building codes, resulting in a Certificate of Occupancy.
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Loan Conversion: The construction phase ends, and the loan automatically converts into a permanent, long-term mortgage (like a 30-year fixed loan). You will then begin paying both principal and interest, with no need to requalify or pay new closing fees.