Construction loan 1x & 2x Close designed to finance the build of a custom home from the ground up.
The Program offers a 30-year term with the construction loan financing for up to 12 months.
Eligible Loan Purposes
- Purchase transaction – The borrower is not the owner of the lot prior to the loan application and will be using the proceeds from the interim construction financing to purchase the lot and finance the construction of the property.
- Limited cash-out refinance transaction – The borrower must have held legal title to the lot before the application date for the interim construction financing. The proceeds from the construction financing will be used to pay off any existing liens on the lot and finance the construction of the property. The “as completed” appraised value of the property will be used to determine LTV.
NOTE: Cash-out refinance transactions are not eligible under this program. Rehab/Remodels are not eligible under this program.
Loan Amount & LTV
- Site-built or modular homes: Primary or Second Homes only
- Detached or Site Condominium
- Available in Michigan Only
- General Contractor is required
- must be a licensed builder
- builder must register with HVF and meet eligibility standards
- Self-builds are not allowed
BUILDER REGISTRATION PROCESS
It is recommended to get the builder registered before you originate the loan to insure they meet HVF eligibility guidelines. Loan Officer must provide a Builder Application Package to the builder to be completed and returned via email to email@example.com.
Required documents include:
- Builder’s Risk Insurance – (all required insurance coverage)
- Current Driver’s License
- Current Builder’s License(s)
- Completed & Signed Questionnaire with References
- Signed Contractor’s Performance Agreement
References will be vetted and the loan officer will be contacted when the builder registration is complete. Builder eligibility is good for 12 months or until their license expires. HVF Construction Department will work with builder to renew registration that expires during the construction project.
Age of Credit and Appraisal Documents
Credit and appraisal documents dated more than 4 months but not exceeding 18 months old at the time of conversion to permanent financing are eligible if all of the following conditions were met at the time of the original closing of the construction loan:
- The documents were dated within 120 days of the original closing date of the construction loan.
- The LTV, CLTV and HCLTV ratios do not exceed 70%
- The borrower has a minimum credit score of 700
If any of the above conditions were not met, updated credit and appraisal documents are required and the borrower must re-qualify for the mortgage loan.
- Funds to Close/Reserves Borrower must have 6 months interest payment in reserves. If borrower owns multiple properties more reserves may be required.
- Title Insurance A HVF Construction approved Title Company must be used. Title Company will collect Lien Waivers / Sworn Statements and Disburse funds to General and all subcontractors.
- Well and Septic Requirements As required by municipality to acquire full Certificate of Occupancy as well as any underwriting requirements to satisfy Agency guidelines.
- Termite Inspection As required by municipality to acquire full Certificate of Occupancy
Interested in Construction Financing?
"It's not If You can Buy it's When!"