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2-Step Flex: Construction-to-Permanent Mortgage

CLC Exclusive...Owner-Contractor (do-it-yourself contracting) - Construction 1Close option!

CLC's 2-Step Flex Construction-to-Permanent Mortgage finances new home construction, major remodeling or renovations. The loan consists of two phases: an interest only construction phase and permanent phase or end mortgage.

2-Step Flex gives borrowers the flexibility to act as your own general contractor (without a builder's license) or you may choose to hire a licensed builder for all, or a portion of, your project. This loan is based off the "as complete" appraised value, as if the home is already completed. This feature allows the borrower to begin a building or remodeling project, with little to $0 money down, in most cases.

• Owner-contractor (no license required)
• Hire a professional, Licensed builder for all, or a part of, your project
• Interest only loan during the construction phase
• 6, 9 or 12 month construction term option
• Homeowner hires sub-contractors of his/her choice
• Purchase your lot at closing
• Build on Your Lot - any balance owed is paid off with first construction draw
• Unlimited Draws (may vary based on state title/escrow regulations)
• Loan is based off "new appraised value"
• 1Close option offers upfront mortgage rate lock at current market rates

How does a 2-Step Flex Construction-to-Permanent Mortgage work?

The first draw of the construction phase pays off any existing mortgages/liens on your lot or home. You pre-select a construction term of 6, 9 or 12 months. The home must be 100% complete by the end of your pre-selected construction term. You (owner-contractor), or the builder, will request draws for payment of materials, supplies and labor during the construction phase of your home. During this construction phase, monthly interest only payments are due based on the total outstanding amount drawn from your construction loan. Once your home is 100% complete, your construction loan is converted into your permanent mortgage and your principal and interest payments begin.

What is the maximum financing available for an owner-contractor on the 2-Step Flex?

The maximum construction loan available is 80% of the appraised value (per plans and specifications) of the home.

If the maximum financing is 80% of the appraised value for an owner-contractor, does that mean 20% down is required?

No, in most cases the total lot and home construction costs are less than the appraised value. This loan gives you the benefit of financing based on the appraised value, as opposed to cost, which offers lower down payment requirements.