Your Loan Originator can help you determine the approximate loan amount and answer any questions
you may have about the construction process.
Start this discussion early in your construction planning to ensure your budget is on track and important issues are properly addressed.
WHAT DOCUMENTATION SHOULD I BRING?
Final HUD-1 settlement statement from purchase of the lot (if applicable)
Copies of invoices and cleared checks for any prepaid items such as surveys, architect fees, plans, etc.
You will need Homeowner's Association approval prior to closing if your property is located in and goverened by a Homeowner's Association
A letter from a licensed drilling company addressing water availability will be required if you anticipate using a private well as your water source.
2. Builder Review
Because your builder is an integral part of the construction process and will be involved in draw requests, we require a thorough review to evaluate the builder's financial stability and experience level.
REQUIRED DOCUMENTATION FROM BUILDER:
Current contractors license
Evidence of liability insurance/bond
List of sub-contractors with licenses and insurances
If you have not selected a builder, you may also consider our list of Reviewed Builders. You will also want to conduct your own appropriate due dilligence on the builder that you ultimately select.
3. Project Documentation
We will need to collect the following items to order your appraisal:
Complete electronic set (PDF) of plans
Construction contract, signed and dated by you and builder
Cost breakdown, signed and dated by you and builder - the total from the cost breakdown shoudl match the amount on your contract
Description of materials and specifications
Any secondary contracts
In the event you have a separate contract for a portion of the project such as well installation, pool driveway pavers, etc.
Purchase contract, if you are purchasing the lot as part of your loan
4. Final Documentation
The ideal time to submit all remaing items is when we are waiting for your appraisal report.
Course of construction/Builder's risk insurance policy - We will need contact information for the insurance agent you would like to use
Public or private utilities and access - There are specific requirements bassed upon whether public or private utilities are available to yoru property. This is to ensure that you have a "buildable site"
Septic: Perc test or copy of septic approval/permit for county
Well: Letter from licensed Drilling Company, data from nerby wells
Shared Well: Shared Well Agreement
Private Road: Road Maintenance Agreement
Any additional prepaid items - Invoice and cleared checks are needed
HOA design approval, if applicable
Building permit, if available
5. Final Approval & Closing
Your completed file will be submitted to underwriting for final approval.
Closing will take place at the Title Company. Your escrow officer will contact you to schedule a time for signing, we will advise you of the exact amount you wil need to bring, typically in the form of a cashier's check or wire. As soon as your loan funds and records, your builder is free to break ground.
6. Construction Phase
Your loan is now complete and you are entering the 12/18 month construction phase. Your builder will typically coordinate submitting the draw request form, which both you and the builder must approve and sign. We will then arrange for a local inspector to visit the site and verify the work has been completed prior to releasing the funds. Remember, funds can only be dispersed for work that has been completed.
IMPORTANT THINGS TO REMEMBER DURING CONSTRUCTION:
Building permits will be required prior to the first draw
During the construction period, interest is only charged onf unds that are actually dispersed - As interest begins to accrue, your monthly interest-only payment will be deducted from the Interest Reserve account setup at closing.
Inland builds a 5% contingency into your loan amount in the event of cost overages, or upgrades - These funds will be available to reimburse you for an unexpected expenses
During the construction phase, you are responsible for paying your property taxes semi-annualy - We
DO NOT escrow during this period
If you are installing a private well, your well registration, pump flow test, and water quality testing results will be required prior to your final draw
The final draw will be made to you and the builder jointly - it will not be issued until the project is 100% complete and the Certificate of Occupancy has been issued
Rolling to Permanent Financing
After the completion of construction, your loan will conveniently roll to a permanent mortgage. Any funds remaining in your construction account will be credited directly towards your principal balance. Your escrow account will be for your property taxes and homeowner's insurance at this time. You may also setup automatic payments for ease and convenience.