The Construction Permanent loan is designed for borrowers to finance the construction phase and permanent mortgage of their primary residence with a single closing.
Advantages
- Same interest rate during construction phase and permanent mortgage
- Fixed rate for 15 or 30 years
- Reduced closing costs
- Possible tax advantages (consult your tax advisor)
- Interest rate guaranteed for up to 12 months during construction phase
- Builder on Franklin Federal's Participating Builder List
- Fully executed purchase contract
- One set of plans and specifications
- Contract for purchase of land or copy of deed
- Standard requirements for permanent mortgage
Once the builder is confirmed to be on Franklin Federal's construction permanent Participating Builder List, the applicant will complete a loan application with a loan officer. The appraisal fee (normally $350) is payable at application. A decision is made and communicated within 24-48 hours as to whether the loan has been approved, subject to a satisfactory appraisal.
Our rates can be locked at application for both the construction and permanent portion of the loan. There is one rate for the construction period and the same rate for the permanent phase.
Please contact a Loan Officer for additional information.
Terms and Conditions
- Builder must have a Class A contractor's license and be employed full-time as a general contractor.
- A construction loan agreement will be required to be executed at loan closing by the borrower and the builder.
- All disbursements will be made directly to the builder. A written authorization by the borrower is required before funds will be disbursed to the builder.
- Title insurance, including affirmative mechanics' lien coverage, is required for all construction-permanent loans. In addition, your builder must designate a mechanics' lien agent for the job. All title insurance companies must be approved by Franklin Federal.
- Flood insurance may be required.
- The term of construction will be indicated in the purchase contract up to a maximum period of 12 months.
- Interim inspections are made by Franklin Federal's designated inspectors, usually within 48 hours of request by the builder. A final inspection is made by the appraiser as part of the appraisal.
- Construction interest is billed monthly during construction.
