One-Time Close Loans for VA, USDA, FHA, Conv.

Construction and Permanent financing rolled into one loan

These products are a fixed rate loan which consists of construction and then a permanent phase. The construction phase provides draws with monthly interest payments on funds disbursed. When construction is complete the loan is converted to a fully amortizing loan for the remainder of the loan period. This is a true one‐time close, therefore, Borrowers will not need to return to the closing agent once construction is complete.

  • Occupancy Type:

    • Conventional: Owner-Occupied and Second Homes.

    • FHA, VA, USDA: Owner-Occupied Only

  • Maximum Loan to Value:

    • Conventional: 90%

    • FHA: 96.5%

    • VA & USDA: 100%

  • Credit Minimum:

    • Conventional: Both Primary Residence & Second Home: 680+

    • FHA, USDA, VA: Primary Residence Only, 650+

  • Loan Amount Maximum:

    • Conventional & VA: Conforming and High Balance Limits.

    • FHA: County Limit.

    • USDA: See County Limit.

  • Term:

    • Conventional: FHA, VA: 15-yr and 30-yr.

    • USDA: 30-yr only.

  • Contract:

    • Fixed price only contracts.

    • Cost Plus build jobs are typically not allowed, however, on a case by case basis may be considered. The Construction CNC Department must review the contract and borrowers’ application to insure adequate reserves are available. A “Guaranteed Maximum Price Contract” is required.

    • Builder must be turnkey, borrower is not allowed to do any of the work.

  • Eligible Properties:

    • FHA, Conventional, VA

      • Site Built and Modular Homes.

      • Panelized Homes are considered Site‐Built Homes for purposes of eligibility.

      • Prestarts will be considered on a case by case basis.

      • Barndominium: 1 unit single family, No steel/post beam, No Morton type or metal exterior siding, Must have concrete slab foundation, No agriculture use.

      • Pools, barns, and, guesthouses are allowed providing they are supported by comparables.

    • USDA (in addition to above)

      • Manufactured Homes new only, never occupied and doublewide or larger.

      • Maximum land is limited to 10-acre parcels. No portion of the land can be agricultural, rentable or capable of producing income; multiple parcels are not allowed. Land cannot be subdivided.

      • Properties may only have minimal, small outbuildings. No major outbuildings - outbuildings are limited to 1 small outbuilding such as a garage, storage shed, or small shop.

      • Properties must be located on a paved or all-weather road.

  • Ineligible Properties

    • Conventional, FHA, VA:

      • No agriculture, Ranch, or Farmland, Manufactured, Log Homes, Bamboo Homes, Metal Homes, Container Homes, Post‐Frame Homes. No self-builds or “Do it yourself” Homes, nor 2-4 Units.

    • USDA:

      • 1-unit properties with accessory units

      • Single Wide Manufactured Homes

      • Condominiums, Condo-Tels, Co-ops, & Timeshare Units.

      • No Pre-Starts

      • Properties located in an area not designated as rural by RHS

      • Working farms, ranches, income producing properties.

      • 2 – 4 unit properties.

      • Leasehold Properties.

      • No Land Loans.

      • No Unique/Niche Construction (i.e. no log homes, no metal homes, no tiny homes, no storage container homes, no barndominiums)

      • Life Estates; Blind Trusts; Irrevocable Trusts; Realty Trusts; Illinois Land Trusts; Leasehold Estates; 1031 Exchanges; LLCs, Corporations and Partnerships; Community Land Trusts; American Indian Land.

  • Appraisal

    • Comps within 5-10 miles maximum.

    • No agriculture, ranch, or farmland allowed.

    • Must have finalized construction contract, plans, specs, plot plan to submit to

      appraiser and request value to be assigned “AS COMPLETED”.

    • NO Appraisal transfers.

  • Lock & Construction Completion

    • Construction must be completed within the rate locked period (6, 9 or 12 mo) to retain the permanent rate.

    • If construction exceeds the locked period, then the borrower will have to re-lock to current market rates at time of completion.

    • Rate Floatdown: When loan converts to permanent, rates will adjust to current market + 1/4 of current market. (Does not apply to USDA)

  • Draws

    • At loan closing, construction soft costs are allowed, land cost/payoff (if applicable), and modular home deposit up to 10% on unit cost. No upfront draws. Construction draws are based on the line‐item percentage of completion method. Funds are only released for work in place and/or for the modular unit.

    • Up to 5 or 6 Draws.

    • Funds are only disbursed when work is completed. No funds distributed for advance for materials.

    • A closing soft cost draw can be done.

  • Draw Request Example

    • The builder can typically expect funds within 3-4 days of the draw request.

    • Requests by the Builder are made via a web portal or email to Trinity Loan Admin.

    • We allow up to six draws to the Builder after closing and including the final draw. Additional draws may be allowed at a cost to the Builder of $295 per draw.

    • Upon receipt of a draw request, the CNC Construction Department will have an independent firm inspect the property and return to us photos and a report with the percentage of completion of each improvement item shown on the Construction Cost Breakdown that the Builder completed prior to closing.

    • Trinity Admin will match each line item’s percentage of completion with the budgeted amount shown on the Construction Cost Breakdown to determine that draw’s dollar amount.

    • All funds will be disbursed directly to the Builder, other than the modular home unit invoice, which will be paid directly to Manufacturer, unless the Builder can provide proof that they have already paid it themselves.

    • The CNC Construction Department does not disburse draws to individual subcontractors that the Builder may be utilizing.

  • Builder Requirements

    • Builder must provide and be responsible for turnkey completion services. Borrower cannot be responsible for any construction items. Therefore, the Builder must act as the Construction Coordinator/General Contractor for the home and all improvements including site work to be completed on the project.

    • Builder must be full time, licensed, in good standing, with suppliers and previous clients. Required to fill out review form and be approved by the construction team.

    • Documents Requested:

      • Current YTD P&L, previous year Corporate Tax Return, and most current Corporate bank statement.

      • Executive Summary providing an overview of experience and history on Company and Principals.

      • Builder’s/Retailer’s License(s):(Include Contractor, Retailer, Installer, etc., as applicable).

      • Certificate of Insurance for General Liability (Acord 25 Form): Minimum of $1,000,000 per Occurrence Required. & Builders Risk policy on property.

Common Questions

  • Payments

    • FHA & VA - No payment during the construction phase.

    • Conventional - I/O of outstanding balance.

    • USDA - Full payment PITI.

  • Lot

    • The lot must be paid off at closing. Lot equity can be used for downpayment needed and potential closing costs.

    • If Lot has a mortgage, when OTC closes the Lot will be paid off.

    • Buyer can purchase land with OTC.

  • NO Appraisal transfers allowed.

  • NO work is to be done by borrower or builder prior to close

  • The loan amount CANNOT be increased after closing.

  • Pools, barns, and, guesthouses are allowed providing they are supported by comparables.

  • “Cost Plus” build jobs allowed only on a case by case basis. The Construction CNC Department must review the contract and borrowers’ application to insure adequate reserves are available. And a “Guaranteed Maximum Price Contract” will be required.

  • What if borrower is not the owner of the lot at closing?

    • Divide the loan amount of the OTC financing by the lesser of – the purchase price (sum of the cost of construction and the sales price of the lot), OR the “as completed” appraised value of the property (the lot and improvements).

  • What if borrower owns the lot?

    • Divide the loan amount of the OTC financing by the “as completed” appraised value of the property (the lot and improvements).

    • Add the subject property to the REO section. Line D = Refinance Amount on the DOT and must include the payoff of any liens against the land.

    • Closing costs can be financed through lot equity currently owned by the borrower providing the LTV does not exceed 90%.

    • The lot equity can be used to setup an interest reserve account to pay the I/O payment during construction. Approval on a case by case bases.