🧠 5 Common VA Loan Myths That Are Costing Veterans Thousands
🧾 One-Time Close Construction Loans: Build and Finance in a Single Step
Build your dream home — with financing designed for the ground up.
Buying a home is one thing — but what if your dream home doesn’t exist yet? That’s where construction loans come in.
👉 A construction loan is a short-term mortgage that helps you finance the cost of building a new home, from the first shovel in the dirt to the final coat of paint.
Here’s how construction loans work, what makes them different, and why working with the right lender makes all the difference.
✅ What Is a Construction Loan?
A construction loan is a type of temporary financing used to:
- Buy land (if needed)
- Pay for labor, materials, and permits
- Fund the construction of a new home
- Transition into a long-term mortgage (in some cases)
These loans are typically interest-only during construction, with funds released in stages as the home is built — called draws.
📘 Once the home is complete, the loan is either:
- Paid off with a new permanent mortgage (two-time close), or
- Converted into a long-term mortgage automatically (one-time close)
🧱 What Can You Use a Construction Loan For?
- Ground-up home construction
- Modular or manufactured homes (with foundation)
- Building on land you already own
- Purchasing land and building on it
- Adding major home improvements (in some cases)
✅ PRMI offers options for primary residences, second homes, and even investment properties, depending on the program.
🔁 How the Construction Loan Process Works
- Apply and get pre-qualified
- Select your builder and floor plan
- Finalize blueprints, specs, and budget
- Undergo lender review and appraisal
- Close on the construction loan
- Builder receives funds in draws as work progresses
- Home is completed and inspected
- Loan is either paid off or converted into a long-term mortgage
💡 The process can take 6–12 months, depending on build time, permitting, and complexity.
💵 How Is the Money Released?
Construction funds are released in phases based on inspections — typically:
- Foundation
- Framing
- Roofing
- Drywall
- Final finishes
This is called the draw schedule, and your builder requests funds as they hit each milestone.
📘 The lender inspects progress at each stage to ensure quality and protect your investment.
🧠 What’s the Difference Between Construction and Regular Mortgages?
| Feature | Construction Loan | Traditional Mortgage |
|---|---|---|
| Purpose | Build a home | Buy a home |
| Payments | Interest-only during build | Full principal & interest |
| Loan Term | 6–18 months | 15–30 years |
| Funding | Draws based on progress | Lump sum at closing |
| Conversion | May need refinance | No conversion needed |
✅ PRMI offers one-time close options that combine the build and mortgage into one — no double closing needed.
🏢 Why PRMI?
We help you:
- Understand the full construction timeline
- Choose between one-time close or two-time close options
- Work with vetted, approved builders
- Avoid delays and budget surprises
- Transition into your final mortgage seamlessly
Whether you’re building on land you own or starting from scratch, we’ll guide you from concept to closing.
👇 Ready to Explore Building a Home Instead of Buying One?
Let’s walk through the numbers, builder options, and approval process — no guesswork, just guidance.