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One Close Construction LoansOne Close Construction Loans are a one-time closing, construction to permanent mortgage loan. The loan provides funds for the acquisition or refinancing of an unimproved residential building lot and the construction of a residential one-family owner occupied dwelling. At closing, the borrower signs all construction and permanent loan documents. During the construction period the borrower makes interest only payments and escrow (if applicable). After the home is completed and all construction funds are disbursed, the loan converts to a permanent loan with regularly scheduled payments of principal, interest and escrow (if applicable). 
Major loan terms and conditions are:
- Borrowers may lock-in a 15 year, 20 year or 30 year fixed rate at application or at any time until the loan closing is scheduled. This rate will then be in effect during the construction period and also when the loan converts to a permanent loan with regularly scheduled payments.
- Maximum financing is 90% of the appraised value or 90% of the construction cost plus the lot acquisition cost, whichever is less.
- Six (6) month construction period. Monthly interest only payments are based on the amount of construction loan funds actually disbursed.
- If the builder selected by the borrowers is not already on the Approved Builder List at First Federal, the borrowers’ recommendations for a specific builder are accepted based upon reviewing the Builder Application and supporting documents. First Federal reserves the right to reject a builder recommendation based on the information provided or received while investigating the builder for approval.
- Owner self-contracted projects are not eligible.
- First Federal will administer all draws. Draws are based on percentage of completed work. The percentage of completed work is established during an inspection completed by an accredited appraiser approved by the Bank.
- Modular housing will be evaluated on a case by case basis. Again, draws will be based on percentage of completion.
- Sweat equity is not permitted.
- No improvements may be started before the loan closing.
- Funds provided by the borrowers at closing and deposited on their behalf are used before loan funds.
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