Builder Services

• Residential Builder Services
• Financing Available
• Builder Draws
• Builder Registration/Qualifications
• FAQ

FAQ

Q. What construction loan terms are available?

A. The Home Buyer may pre-select their construction term ranging from 6, 9, or 12 months.

Q. How are draws disbursed?

A. Draws are disbursed directly to the Builder and/or sub-contractors based on percentage of completion.

Q. How much of a down payment does the Home Buyer need?

A. The minimum down payment is 5%-10% of the land cost plus construction costs. A larger down payment may be required in restricted markets as defined by Fannie Mae or MI companies. If the Home Buyer has previous title to their lot, lot equity can be verified and counted toward the down payment requirements.

Q. Does the Home Buyer have to purchase (or own) the lot prior to applying for this construction loan?

A. No, this program allows the Home Buyer to purchase the lot simultaneously with the closing of the CTP mortgage.

Q Where is this loan processed?

A. The Construction Loan Company's (CLC) Construction Department is located in Michigan.

Q. What if I am located in a different state than MI, how are inspections completed?

A. CLC works with Builders and Home Buyers nationally. Inspections are ordered through our third party inspection company.

Q. How long does it take the Builder to receive draw funds?

A. Draw funds are quickly processed and disbursed within 3-5 business days from CLC's receipt of the draw request. Draw funds are processed via wire and/or check.

Q. How long does it take to close on a loan?

A. Once CLC has a complete application package (including the appraisal); it takes approximately 5 business days for underwriting and loan approval. Once loan approval is obtained, closing can be scheduled within the next 3-5 days. The average time from application until closing is 45 days provided the Home Buyer has final plans, Contract and specs at application.

Q. What documentation is needed from the Builder?

A. A complete Builder Registration Form and required documents. Click here for Forms and Tools.

Q. Does this CTP mortgage close in the Home Buyer's name?

A. Yes, the CTP mortgage closes directly in the Home Buyer's name.

Q. Is an appraisal required?

A. Yes, a satisfactory 1004 appraisal (ordered by CLC) is required.

Q. How is the interest rate determined?

A. The interest rates are priced daily for the CTP mortgage program. The Home Buyer can apply online and receive instant interest rate and closing costs information on our website.

Q. Is the mortgage interest rate locked once the loan is closed or is the rate determined when the home is complete?

A. The interest rate is locked once the loan is closed. The construction interest rate is .250% higher than the mortgage rate. The interest rate quoted on our website is the permanent mortgage rate; thus, add .250% for the interim construction phase rate.

Q. What type of property is eligible for this financing?

A. Single family (one unit) residences and second homes (one unit) depending upon the loan-to-value. Condos, town homes, manufactured homes, commercial property and residential developments are not eligible.

Q. What type of survey is required?

A. A foundation survey/endorsement (footing stage) is required prior to the first draw.

Q. What is the draw schedule?

A. The average draw disbursement schedule is based on percentage of completion:
Lot payoff at closing, 15% Foundation, 35% Rough Structure, 20% Exterior Weather tight, 20% Drywall/Finish Carpentry and 10% Final Inspection/Completion. If the Builder prefers a slightly different draw schedule, please submit a preferred draw schedule along with your application package for review.

Q. What is the maximum loan amount?

A. $417,000 is the maximum loan amount. For properties located in Washington, the maximum loan amount is $1 Million with 30% down.

Q. How much are closing costs?

A. Closing fees are priced directly in our Loan Consultant online. Our system is able to generate an on-the-spot loan quote and Good Faith Estimate based on the home buyer’s loan details. Closing fees may be rolled into the construction loan provided the loan-to-value permits.

Q. Can an Interest Reserve Account be established to make the Home Buyer's construction loan payments?

A. Yes, an Interest Reserve Account may be established provided the loan-to-value permits. Typically, significant lot equity (lot free and clear) or cash down assists with the ability to set up an Interest Reserve Account. The Interest Reserve Account will be estimated by CLC and based on the Builder's draw schedule, timeframe needed for construction, etc.

Q. Whom do I contact for additional questions?

A. Please call (877) 562-6862 toll free or contact Dawn Rudie at .