Construction to permanent loans combine your construction financing and your permanent mortgage into a single loan that closes once — saving you two sets of closing costs and two qualifying events. Mortgage-World.com is a mortgage broker licensed in NJ, CT, and FL shopping multiple loan programs for Conventional and VA one-time close construction borrowers.
Construction to Permanent Loans — 2026 Guidelines, Rates & Requirements
A construction to permanent loan combines your construction financing and permanent mortgage into one loan with one closing — no second application, no second set of closing costs. Conventional and VA options available.
★ Updated July 2026 | Mortgage Broker | Multiple Loan Programs | Serving NJ, CT & FL Since 2017
Ready to build your new home? We compare multiple loan programs to find the best construction to permanent loan rate for your project and credit profile. Get My Construction Loan Quote — Free
1 One Closing One Set of Costs
95% Max LTV Conventional (1 Unit)
100% Max LTV VA (No Down Payment)
11mo Max Construction Period Allowed
Construction to Permanent Loans — Key Numbers at a Glance | Mortgage-World.com
Your Answer Right Here
What Is a Construction to Permanent Loan?
A construction to permanent loan — also called a one-time close construction loan or C2P mortgage — finances the building of your home and converts automatically to a long-term mortgage at completion. You qualify once, close once, pay one set of closing costs. During construction, interest-only payments apply on the drawn balance. Once the certificate of occupancy is issued, the loan becomes a 15- or 30-year fixed mortgage with no second application. The CFPB notes construction loans require more documentation than standard mortgages — we manage the draw schedule and lender coordination so your build stays on track.
Program Snapshot
Conventional vs. VA — Side-by-Side Program Comparison
Both programs use a single closing with interest-only payments during construction. Key requirements at a glance:
Feature
Conventional OTC
VA OTC
Eligible Borrowers
Any qualified borrower
Veterans, active duty, surviving spouses
Max LTV (1 Unit Primary)
95%
100%
Min Credit Score (FICO/Vantage)
620 / 640
580 / 640
Construction Period
Max 11 months
Max 11 months
Term Options
15- or 30-Year Fixed
30-Year Fixed; Jumbo available
Down Payment Required
5% (1 unit primary)
$0 (eligible veterans)
Investment Properties
Allowed (lower LTV)
Primary residence only
Temp Buydowns
Not permitted
Not permitted
Construction to Permanent Loans — One-Time Close Process | Mortgage-World.com
Conventional Program
Conventional Program Parameters, LTV & MI Coverage
One-time close fixed — 15- and 30-year terms with interest-only payments during construction. Maximum construction period: 11 months.
Basic Product Parameters & Requirements
AUS & Builder Requirements
Project and builder must be lender-approved before closing. Escrow waiver required during construction. Temporary buydowns are not permitted.
Loan Amount & Contingency
Maximum loan amount based on the conforming limit for units and county. A 5% contingency fund is held from the construction cost. Principal reductions are not permitted during construction.
Document Freshness & Final Draw
Credit documents cannot exceed 12 months at modification — income may need refreshing before permanent conversion. The final draw is withheld until all construction processes are complete: final inspection, CO, and modification to permanent financing returned.
VA Construction Loan Eligibility, LTV & Key Requirements
The VA one-time close construction loan is available to eligible veterans, active-duty servicemembers, and surviving spouses — 100% financing on a primary residence with no down payment and no monthly mortgage insurance.
● Loan Terms & Eligibility
30-year fixed and 30-year jumbo fixed. Interest-only payments during the build, max 11 months. Refinances submitted as Cash Out per VA guidelines. Conventional product follows Fannie Mae guidelines. Primary residence only. Co-ops and attached condos not permitted.
● Max LTV & Loan Amounts
100% LTV on purchase for 1-4 unit primary residences. Max base loan at conforming loan limit; jumbo minimum is $1 over that limit, up to $4,000,000. Split entitlement is eligible for married veterans.
● Builder & Project Requirements
Project and builder must be pre-approved before closing. Manufactured properties permitted on non-jumbo, 1-unit only. A 5% contingency fund held from the build cost. Escrow waiver not permitted. AUS must be DU Approve/Eligible.
● Credit & Income Requirements
Minimum FICO/Vantage 580/640. All borrowers must have a qualifying score. Full income documentation required per VA guidelines. Principal reductions not permitted during construction. Final draw withheld until final inspection, CO, and modification to permanent financing are complete.
Beyond standard purchase requirements, construction to permanent loans add builder approval, draw management, and document freshness checks. Here is what lenders evaluate.
● Builder Approval
The builder must be licensed, insured, and approved by the lender before closing. Lenders review the builder's track record, financial standing, and construction contract. Selecting a builder early and gathering documentation speeds approval. Self-build and owner-builder scenarios are generally not permitted under standard Conventional or VA one-time close programs.
● Credit Score
Conventional one-time close requires a minimum FICO/Vantage score of 620/640. VA requires 580/640. All borrowers must have a qualifying score. Credit monitoring during the build period is recommended, as construction to permanent loans span a longer window than standard purchases.
● Income Documentation
Full documentation is required — two years of W-2s, tax returns, 30 days of pay stubs, and bank statements. Income documents cannot be more than 12 months old at the time of the modification to permanent financing, so plan for a possible refresh if the build runs long. See the HUD homebuyer resource for general guidance.
● Reserves & Down Payment
Conventional borrowers need a minimum 5% down on a 1-unit primary. VA borrowers with full entitlement need no down payment. Lenders look for adequate reserves — typically 2 months of PITI. A 5% contingency fund is required from the construction cost and held in escrow.
Why It Matters Who You Work With
Why Use a Broker for Your Construction Loan
Construction to permanent loans are more complex than a standard purchase. The builder must be approved, the draw schedule managed, and the file kept current through an 11-month window. Most retail banks offer only their own rate. As a mortgage broker we shop multiple loan programs to find the strongest rate and most flexible guidelines for your build — whether you are a W-2 employee on conventional or an eligible veteran on the VA program. See our Conventional Loan page and VA Loan page.
Ready to build? Tell us your property location, build cost, credit score, and income type. We identify the right program and lender before you sign a construction contract. Start your free construction loan application.
Related Resources
Related Mortgage Pages
Construction-to-perm financing converts to a permanent loan at completion. These pages cover the programs that take over.
Find out exactly what you qualify for — free, no obligation.
What Clients Say
Real Reviews From Our Clients
Here’s what a few of our clients said about working with Mortgage-World.com.
★★★★★
“Chris Luis is the BEST mortgage broker on this planet! If you’re looking to buy a home, definitely give him a call. Chris will go above and beyond to try to help you!”
— Tanya W.
★★★★★
“I had an opportunity to work with Chris when I did my refinancing. I would highly recommend his services to anyone. He was efficient, helpful and very prompt in responding.”
— Aurora T.
★★★★★
“Julia Luis has been very professional and has been very helpful during the process! Anyone looking for someone to assist them in their future adventures needs to have her on your side! Thank you for being there for me!!”
Common Questions From Borrowers Building a New Home
What is a construction to permanent loan and how does it work?
A construction to permanent loan — also called a one-time close or C2P loan — combines your construction financing and your permanent mortgage into a single loan with one closing and one set of closing costs. You make interest-only payments during the build. When your certificate of occupancy is issued, the loan converts automatically to a 15- or 30-year fixed mortgage without a second application.
What is the maximum loan-to-value for a construction to permanent loan?
Conventional one-time close: 95% LTV on a 1-unit primary, 90% on a second home, 85% on a 1-unit investment property. VA construction to permanent: 100% LTV for eligible veterans on a primary residence — no down payment required. Conventional loans above 80% LTV require mortgage insurance.
How long can the construction period last on a one-time close loan?
Both programs allow a maximum 11-month construction period with interest-only payments on the drawn balance. The final draw to the builder is withheld until all construction processes are complete — final inspection, certificate of occupancy, and modification to permanent financing.
Does my builder need to be approved before I close on a construction to permanent loan?
Yes. Both programs require that the project and builder are approved by the lender before closing. The builder must be licensed, insured, and meet lender criteria. Self-build and owner-builder arrangements are not permitted under standard one-time close guidelines.
What is the minimum credit score for a construction to permanent loan?
Conventional one-time close requires a minimum FICO of 620 or Vantage of 640. The VA construction to permanent program requires a minimum FICO of 580 or Vantage of 640. All borrowers must meet the qualifying score. If your score is borderline, we can review your credit profile and outline steps to strengthen it before application.
Can a veteran use the VA one-time close construction loan with no down payment?
Yes. Eligible veterans, active-duty servicemembers, and surviving spouses can use the VA construction to permanent loan to build a primary residence with 100% financing — no down payment required, no monthly mortgage insurance. The program is available as a 30-year fixed and 30-year jumbo fixed with base loan amounts up to $4,000,000.
Ready to Break Ground? Let’s Find Your Best Construction to Permanent Loan.
Tell us your build location, estimated construction cost, credit score, and veteran status. We shop multiple loan programs and find the best one-time close program for your project — no obligation, no hard pull to start.
Written By: Chris Luis — Broker/Owner, Mortgage-World.com — NMLS #1630225
I’ve been originating mortgage loans for over 20 years, since 2002. Mortgage-World.com has operated as a licensed mortgage broker since 2017, working across multiple loan programs — FHA, VA, conventional, jumbo, and Non-QM — so each borrower is matched to the program that fits their situation. If one bank’s guidelines say no, the right program often says yes.
