Home Construction and Renovation: HomeStyle Construction to Permanent

What is it?  

HomeStyle Construction to Permanent is designed for individuals who are building their own home and provides one mortgage to take you through the entire process.

How does it work?

With a HomeStyle® Construction-to-Permanent (C-to-P) Mortgage individuals and families can finance the purchase of land, construction of a new home, and a permanent mortgage at one time. This method saves the borrower money and time by having just one loan approval and one loan closing. Borrowers can even lock in an interest rate before construction begins.  Without this mortgage product borrowers would be forced to get separate loans for the land acquisition, the construction costs, and the permanent mortgage.

Who does it help?

The Homestyle mortgage assists individuals and families who are building their own.

What are some of the important features of the mortgage?

• A HomeStyle Construction-to-Permanent Mortgage is available for a home that the borrower will live in as their primary residence, as well as certain other properties. Individuals and families can borrow money to build a home from the ground up, or to finish building a home that is currently under construction.
• Borrowers can select from a fixed-rate mortgage with a term of 15 or 30 years, or a 30-year adjustable rate mortgage (ARM) that has annual rate adjustments after the 3rd, 5th, or 7th year.
• There is only one set of closing costs and borrowers can lock in the interest rates on the construction phase and the permanent mortgage at the same time.
• This mortgage can also cover the cost of buying the land on which the house will be built.
• The construction phase can be financed for 6, 9, or 12 months and extended for up to 6 more months for an additional fee.
• During construction, borrowers pay only the interest on the funds they actually receive. This means lower monthly payments as the home is being built. Or with the interest reserve option, borrowers can delay paying interest while they continue to pay the mortgage on their existing home.
• Individuals and families can borrow up to 95% of the land acquisition plus construction cost of the home, which means their down payment, may be as low as 5% of the amount of the mortgage.

Where can I find more information?

Contact a Fannie Mae lender partner in your area by using the Fannie Mae Find a Lender Search.  

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