Financing

Best Financing Rates with Renovation Loans for Major Home Remodeling Projects

Single-Close, Construction-to-Permanent loans

A major renovation requires the right combination of construction expertise with easy, affordable financing.

With a Construction-to-Permanent loan, you can enjoy a single-close loan program that will make the smooth transition from renovating your home to living in your home… and will save you time and money!

  • Specifically designed for structural improvements, such as additions and whole-home renovations
  • Borrow up to $2,000,000 on your primary residence
  • Converts to a Permanent Mortgage when Construction is Complete
  • Lowest settlement costs
  • Pay Closing Costs Once with our One-Time Closing
  • Up to 12-Month Construction Phase with Interest Only Payments
  • Fixed Conventional Loans or ARM Loans Available
  • Design Build Remodeling Group of Maryland must perform work up front, and is reimbursed periodically throughout construction upon Lender’s inspections!

Design Build Remodeling Group of Maryland works closely with our preferred lender and our valued clients every step of the way, to ensure that every major home improvement project goes according to plan.

Single-Closing Transaction Overview

Single-closing transactions may be used for both the construction loan and the permanent financing if the borrower wants to close on both the construction loan and the permanent financing at the same time. When a single-closing transaction is used, the lender will be responsible for managing the disbursement of the loan proceeds to the builder, contractor, or other authorized suppliers.

Because the loan documents specify the terms of the permanent financing, the construction loan will automatically convert to a permanent long-term mortgage upon completion of the construction.

Loans that combine construction and permanent financing into a single transaction cannot be pooled or delivered to Fannie Mae until the construction is completed and the terms of the construction loan have converted to the permanent financing.

Terms of Construction Loan Period for Single-Closing Construction-to-Permanent Mortgages

For all single-closing construction-to-permanent transactions, the construction loan must be structured as a temporary loan exempt from the ability to repay requirements under Regulation Z. The construction loan period for single-closing construction-to-permanent transactions may have no single period of more than 12 months and the total period may not exceed 18 months. Lenders may, when needed to complete the construction, provide an extension to the original period to total no more than 18 months but the documents may not indicate an initial construction period or subsequent extension of more than 12 months. After conversion to permanent financing, the loan must have a loan term not exceeding 30 years (disregarding the construction period).

As examples, lenders may structure the construction loan period as follows:

  • three 6–month periods,
  • one 12–month period and one 6–month period, or
  • six 3–month periods.

Exceptions to the 12-month and 18-month periods will not be granted. The above construction period requirements do not apply to two-closing construction-to-permanent transactions. If the construction loan period exceeds the requirements above, the lender must process the loan as a two-closing construction-to-permanent transaction in order for the loan to be eligible for sale to Fannie Mae

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