Plaza Home Mortgage's wholesale division on Monday rolled out a one-time close, construction-to-permanent loan that meets Fannie Mae underwriting guidelines.
"With limited inventory in many markets, and housing demand continuing to increase, we've heard in the marketplace that customers are looking for this option," Jeff Leinan, executive vice president of national wholesale production at Plaza, said in an interview.
The loans can be secured by owner-occupied primary residences or second homes, and can cover construction periods for six, nine or 12 months, according to a company press release. Both standard conforming and high-balance conforming loans may qualify up to a maximum loan-to-value ratio of 70%.
Plaza is offering online training related to the loan program and may add other construction loan options in the future. It drew on its related experience with renovation lending to create the construction lending program.
Nonbank mortgage lenders and loan brokers have been showing more interest in construction financing as interest in the new-home market has increased, but traditional lenders may lack experience managing the specialized risks that can surface during the construction process.
New-home sales recently exceeded estimates and rose to a seasonally adjusted, annualized sales rate of 667,000, according to
In a single-close financing, the construction loan converts directly into a permanent mortgage for the house, removing the need to requalify borrowers and close two loans separately.
