What Is a One‑Time Close Construction Loan?
A One‑Time Close construction loan, also known as a construction‑to‑permanent loan, combines your construction financing and permanent mortgage into one single loan with one closing. With a One‑Time Close loan from Capital City Home Loans, eligible borrowers may also finance the purchase of their land as part of the loan.
Because everything is handled in one transaction, you:
- Go through the loan process only once
- Avoid a second closing when construction is complete
- Reduce uncertainty during the homebuilding process
Why Choose a One‑Time Close Construction Loan?
A One‑Time Close loan is designed to make building a home simpler, more predictable, and more cost‑effective. Borrowers often choose this option because it offers:
- One closing instead of two
- Potential savings on closing costs
- No need to re‑qualify after construction
- The option to lock in your permanent interest rate, with a float‑down feature if rates improve before conversion
- A streamlined, borrower‑friendly experience
How Does a One‑Time Close Loan Work During Construction?
Once your One‑Time Close loan closes:
- Construction funds are distributed in stages (draws) as your builder completes approved phases of work
- Funds can be used only for qualified construction costs
- Inspections are performed to confirm progress and quality
- After construction is finished, the loan automatically converts to a permanent mortgage—no additional closing required
Do I Need to Apply Again After Construction Is Complete?
No. With a One‑Time Close construction loan from Capital City Home Loans, you typically do not need to re‑apply or re‑qualify once construction is finished.
In some cases, you may be asked to provide limited updated documentation, but there is no second underwriting or full loan application.
What Payments Will I Make During Construction?
During the construction phase, borrowers usually make interest‑only payments based on the amount of funds that have been drawn. This keeps monthly payments more manageable while your home is being built.
Once construction is complete, the loan converts to standard principal and interest payments on your permanent mortgage.
Can I Lock My Interest Rate Before Construction Begins?
Yes. Many One‑Time Close programs allow borrowers to lock in a maximum permanent interest rate at the initial closing. This can help protect you from rising rates during construction.
Some programs also offer a float‑down option, allowing you to take advantage of lower rates if they improve before loan conversion. Rate‑lock features vary by program.
How Much Down Payment Is Required?
Down payment requirements depend on the loan program and your financial profile. In many cases, if you already own the land, existing land equity may be used toward your down payment, subject to lender guidelines and appraisal.
Do I Need to Use a Specific Builder?
Yes. Builders must be licensed, insured, and approved by Capital City Home Loans.
Builder approval helps ensure:
- The project meets lender requirements
- Construction stays on schedule
- Funds are managed responsibly
- Your investment is protected throughout the build
How Long Do I Have to Complete Construction?
Our One‑Time Close construction loan typically allows 12 months to complete construction. If delays occur, extensions may be available up to 24 months, depending on the loan program and individual circumstances.
What If Construction Costs Increase?
Any changes to the approved construction budget must be reviewed and approved. Borrowers are generally responsible for cost increases unless contingency reserves or approved change orders are available.
Working with an experienced builder and a detailed budget helps minimize unexpected expenses.
What Types of Homes Can I Build?
One‑Time Close construction loans with Capital City Home Loans are commonly used for:
- Custom homes
- Semi‑custom homes
- Single‑family primary residences
- Single‑family secondary homes
All properties are subject to loan guidelines and underwriting approval.
What Do I Need to Apply?
To apply for a One‑Time Close construction loan, borrowers typically provide:
- Income, asset, and credit documentation
- Construction plans and specifications
- A detailed construction budget
- A signed contract with an approved builder
Your Capital City Home Loans loan professional will guide you through each step of the process.
Why Work With Capital City Home Loans?
Capital City Home Loans specializes in streamlined construction‑to‑permanent financing designed around the borrower. Our One‑Time Close loan program helps simplify the homebuilding process, reduce uncertainty, and provide long‑term financing confidence—so you can focus on bringing your new home to life.