Jen Guidry > Construction Loans

Construction Loans

We are offering some of the most competitive construction loans in the San Antonio market.

To be approved for a construction loan, not only will you have to go through the typical process of proving your creditworthiness and ability to repay the loan, you’ll also have to show the lender detailed plans for the project, including cost estimates. The lender may also need to approve of the company that’s building your home.

You won’t be approved for a construction loan until you have all these details sorted out. 

Once you’ve got your plan and your loan approval, and you’re preparing to break ground, your builder will receive the first disbursement of the funds.

With construction loans, the money isn’t given to you all at once. Instead, the builder receives a series of disbursements called “draws.” Whenever your builder requests a new draw for the next stage of work, an inspector will come to the site and check out the progress on behalf of the lender.

Before you break ground, be sure both you and your builder understand the lender’s draw schedule, including when and how disbursements are made.

One-Time Close Construction Loan

  • Just as it says…you close one time. One set of closing costs and your rate is locked at the time of closing.
  • Offers a modification option to qualified borrowers upon completion.
  • Affords borrowers confidence in knowing that their permanent loan is secured.
  • Loan payment is interest only based upon drawn funds during construction and then modifies to permanent and fully amortizing loan once home is complete.
  • Recast options are available.

Two-Time Close Construction Loan

  • Borrower gets a separate construction loan and then has to re-qualify for a separate permanent loan.
  • Perfect for borrowers who want to use a specialty program for the permanent loan (such as VA or certain jumbo loans).
  • Perfect for a borrower who has a home to sell, but doesn’t want to move twice. Can qualify with higher debt-to-income ratios.
  • Downfall: 2 sets of closing costs (with most lenders- NOT First United)— construction loan and then for permanent loan. Also subject to rates rising during construction period for a permanent loan. Rates could always decrease too!

*This is not an offer for extension of credit or commitment to lend.  All loans are subject to program guidelines and final underwriting approval.  Not all applicants qualify.  Information and pricing are subject to change at any time and without notice.  The content in this advertisement is for informational purposes only. Please contact Jennifer for additional guidelines.

Misconceptions

  • All banks/credit unions/Mortgage Companies are created equal.Absolutely not! We urge you to shop around. EXPERIENCE is also a key aspect.
  • I don’t need insurance on the house when it is being built. Builders Risk Insurance is required (either paid by builder or borrower) and Liability Insurance is also highly recommended.
  • Construction Loans and One-Time Close Construction Loans are so difficult to get, I might as well not even try.They really aren’t difficult if you are working with someone who is experienced in construction lending. They are just like any other loan, except there is just a little more paperwork involved. The process is exciting and much easier than you would think!

Construction Loan FAQs

How many closings do we need to go through in order to build our home?

Anywhere between 1-3! Choice A: Buy lot, do Construction Loan, refinance with permanent loan = 3 closings. Choice B: Buy lot, do One-Time Close Loan = 2 closings. Choice C: Close on lot and One-Time Construction Loan at same time = 1 closing.

How can I actually coordinate closing on everything at one time?

It’s kind of tricky, but it can be done! Easiest: Buy lot from the builder or developer that is building your home. Harder: Have your builder picked out ahead of time. Design your home and complete the plans, specs and most of the budget (except for the site costs). Seller of lot must agree to a slightly longer than normal closing time (45-60 days) so that you can get final bids for site costs finalized before everything goes to the lender. Hardest: Find seller of lot that is willing to have a very extended closing time-frame (up to 120 days) so that you have time to find builder, do home design, plans, specs etc. and for lender to go through their process.

What is the different lengths offered on the construction loans for build time?

Typically, a 12 month construction period is allotted. You just have to let the lender know up-front what is expected. If you run into a snag, we will give you up to an additional 6 month increase in time.

Do I make payments on the loan during the construction period?

Yes. The payments are interest only based on what is drawn.

If I already own my own lot, can I just use my equity as my down payment?

YES!! In some cases, your land equity can cover your entire down payment and closing costs.

When is my down-payment due?

Your down payment is due when you close on your loan.

Does my builder need to get vetted with First United?

Yes! We will have the prospective builder fill out a questionnaire and then will check references and run business reports on them if we have not previously worked with them. We do this for both your protection and ours.

What if I want to build the house myself?

No! You cannot be the builder of record for your own home. You will have to find a different builder of record. The borrower cannot be the same person as the one who also signs the mechanics lien. If you are a builder and would like to build your own home, First United Bank (not the mortgage company) may be able to finance this for you. The bank also does spec lending…so just inquire!

Is there a limit to the amount of draws a builder can take and how involved is the borrower in the draw process?

Typically, draws are about once a month, but we will allow up to two. Borrowers and the builder have to sign off on each draw before it can be processed. Once a signed draw request is received, we will send an inspector out there to make sure the work is completed. Upon satisfactory receipt of the inspection, we will fund the draw request. This process takes approximately 3 days.

What if I want to put more money down once the house is complete? Will it change my end payment even with a One-Time Close? What if we don’t end up using all of the money that we were allotted in the construction loan?

You can absolutely make a principal reduction when the loan goes to a permanent loan and it will lower the end payment. Also, whatever money you don’t use during construction will go as a principal reduction on the end loan

Can you use the One-Time or Two-Time Construction loan for major renovations or for a tear down?

YES! You can do these loans on a home you already own or for a home that needs major rehab that you would like to purchase.

Team Guidry

Jennifer Guidry

Mortgage Loan Officer
NMLS 323935

Direct: 210-572-9171
Mobile: 210-838-3310
jen.guidry@thebankofsa.com

Ryan Fay

Mortgage Account Manager
NMLS 745670

Direct: 210-572-9176
Mobile: 210-394-4952
Ryan.fay@thebankofsa.com

Robert Meagher

Mortgage Loan Assistant
NMLS 996241

210-572-9177
teamguidry@thebankofsa.com

Mary Moore

Mortgage Loan Assistant
NMLS 1495240

210-572-9175
teamguidry@thebankofsa.com

Our Services

Need Help ?

Please feel free to contact us. We will get back to you with 1 business day. Or just call us now

 210-572-9171
jen.guidry@thebankofsa.com