Construction Loan


A “one-time-close” financing arrangement for a construction loan combines the three phases of a two-time close into a single, streamlined process. With the “one-time-close” transaction, the interim and permanent loan financing closes prior to construction. In essence, Capital City Home Loans acts as both the interim construction lender and the permanent mortgage lender.


  • Borrower chooses a builder
  • Builder eligibility and review
  • Cost-to-Construct is prepared (purchase contract) and executed by all parties


What happens if my construction phase goes over 12 months?

Depending on the loan program, homebuyers may request an extension approved initially at 6 months, with a fee.

Will I have to requalify once my home is completed?

Depending on the loan program, homebuyers with credit reports, income documents and appraisals not exceeding 12 months will not have to requalify if the following conditions were met at the time of the original closing:

  • Down payment is at least 5% (95% loan-to-value ratio)
  • Homebuyer(s) have a minimum 700 credit score

Is insurance required during the construction phase of my loan?

  • Builders Risk insurance is required during the construction phase
  • If the property is located within a Special Flood Hazard Area (SFHA), a Coastal Barrier Resources System (CBRS) or Otherwise Protected Area (OPA), flood insurance is required
  • Once the house is complete and before the loan converts to permanent financing, a 12-month prepaid homeowners insurance policy is required


Can I raise my loan amount after closing to cover upgrades and/or overages?

Changes cannot be made to the loan amount after closing; any upgrades, overages or additions to the original construction cost are paid by the borrower.

Can I remove Mortgage Insurance (MI) at the time of modification?

Yes, with the following conditions:

  • If the request is made to cancel MI in conjunction with a principal reduction at modification, an appraisal is required at the borrower’s expense
  • If the request is made to cancel MI without a principal reduction, refinancing with a new application is required
    • Note:
      • Purchases must curtail based on the lesser of the sales price and appraisal
      • Refinance LTV is based on the new appraisal value

If questions or concerns arise during the construction phase (after closing), click here to refer to our website, or contact your mortgage consultant.