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One-Time-Close Construction Loans

One-Time-Close Construction Loans

If you are looking for financing to build your new home, you may not know where to start. It can be a headache to deal with the different stages of a tradition construction loan: the “pre-approval” or “commitment” stage, the “interim lending” stage, and the “permanent loan” stages. This is where the One-Time-Close option comes in. With a One-Time-Close construction loan, those three stages are combined into one single process. With this type of transaction, the borrower is able to obtain permanent loan approval, as well as close the interim and permanent loan transaction before construction begins, all in one single transaction.

Loan Requirements

Credit

  • FHA: Minimum 530 FICO (limits to LTV/CLTV may apply)
  • VA: Minimum 530 FICO & Including No Score
  • Conventional: Minimum 700 FICO (limits to LTV/CLTV may apply)
  • Full tri-merged credit report with scores—Credit report valid for 90 days

Loan Term

  • Fixed Rate Mortgage (FRM): 10—30 year terms

Max LTV

  • FHA: 580+ FICO and No Score: 96.5% LTV calculated per FHA Guides
    < 580 FICO: Maximum 90% LTV
  • VA: 100% LTV plus VA funding fee
  • Conventional: 70% LTV Maximum

Occupancy

  • FHA & VA: Owner Occupied Only
  • Conventional: 1 Unit Owner Occupied, 1 Unit Second Home

Property Eligibility

  • FHA
    • New Construction: Modular (off-frame only), Manufactured (double-wide or larger), and Traditional Construction.
    • Manufactured Homes: Engineer must certify foundation plans meet FHA guides. Must be titles as real property or have recorded affixation affidavit.
    • Loan may include simultaneous purchase of the land/lot or loan can be guaranteed for the construction of home on land/lot already owned by borrower.
  • VA
    • New Construction: 1 Unit Residential Property, Condominiums, Manufactured (double-wide or larger), and Modular Homes.
    • Condominium: Project must be acceptable/approved by VA.
    • Manufactured Homes (off frame only): Must meet all MPR-related requirements for proposed or under construction per VA Guides. Manufactured Homes can be new or used, however used Manufactured Homes to be moved to purchaser’s lot to be affixed to permanent foundation require additional inspections.
    • Loan may include simultaneous purchase of the land/lot or loan can be guaranteed for the construction of home on land/lot already owned by veteran.
  • Conventional
    • Single-Family-Detached, Modular (off frame only), and Manufactured. No Co-ops.
    • Manufactured Homes: Property may not have been currently installed prior to subject lot.

Credit History

  • FHA: Borrowers with traditional credit histories and credit scores will be underwritten on their own merits. Non-traditional and derogatory credit history considered.
  • VA: Borrowers with credit scores will be reviewed based on existing credit history. Borrowers with no score must provide alternative credit references.

Fees the Builder Must Pay

  • On a VA construction / permanent home loan, the builder is responsible for:
    • Interest payments during the construction period
    • All Fees normally paid by a builder who obtains an interim construction loan. This includes, but is not limited to:
      • Inspection fees and re-inspection fees
      • Title update fees
      • Construction loan fees
  • On an FHA construction/permanent home loan, the builder is TYPICALLY (though not required) responsible for the fees listed above.

Fees the Borrower Can Pay

  • FHA: The borrower may pay any fees and construction interest. A specific agreement between Borrower and Builder as to the responsible party for fees and interest is required.
  • VA: The veteran may not pay any fees that are the builder’s responsibility.

Additional Information

  • Conventional
    • All contracts must be fixed price.
    • Payments during construction will be based on the outstanding drawn balance and will be drawn from interest reserve if applicable, otherwise payment will be due.
  • Maximum 12-month construction period.
  • Maximum of 9 draws; Local inspections make for an easy draw process.
  • Payment automatically converts from Interest Only to Fully Amortizing payment after construction.
  • Investment properties, jumbo loan amounts, spec builds, & self builds not available with the 1x-close construction program; these options are available with the 2x-close (traditional) construction program (call or email for more info).
Written by Central Coast Lending - Go to Central Coast Lending's Website/Profile
805.543.LOAN info@centralcoastlending.com
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New Listing – 3 Bedroom 2 Bath in Paso Robles


This one is a cutie! Pride of ownership shows throughout. Lots of natural light as soon as you walk in the front door. Fronts the street with side entry driveway to attached garage. Living room with fireplace. Dining nook. Cheery kitchen. Spacious master suite. Easy care backyard. Front yard is watered by the HOA and is paid for by the HOA. This one is ready for new homeowner to appreciate!
Kim Bankston 805.674.2298

Written by Keith Byrd - Go to Keith's Website/Profile

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New Listing- 5 Bedroom 3 Bath Single Story


Great one story, five bedroom home in Nipomo. Featuring two master suites and a formal living and family room, this home offers nice upgrades and a flowing floorplan. Roomy kitchen with breakfast bar, pantry and lots of storage open to the dining area and family room. Enjoy two fireplaces as well as two backyards for separate entertaining. Cute courtyard for privacy, too!
Wendy Teixeira 805.310.3505

Written by Keith Byrd - Go to Keith's Website/Profile

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New Listing- Beautiful 3 Bedroom Santa Maria Home

Beautiful Single Story Move in Ready Home! 3 Bedroom plus Den/Office with 2 Bathrooms, Approx. 1,540 sq.ft. with 2 Car Garage. Black Granite Kitchen Counter Tops ,Gas Range and New Microwave. Spacious Livingroom with Tile and Gas Log Fireplace, Recessed Lighting and Ceiling Fan. Upgraded Bathrooms and Vanities with Granite Counter Tops, with Custom Tile Work. Dual Pane Windows with Plantation Shutters Throughout. Large Master Suite has a Mirrored Triple Door Closet and Remodeled Shower. Fenced Rear Yard Features a Covered Patio. ***Information deemed reliable but not verified or guaranteed by broker.***
Shea Hutchinson 805.260.6322

Written by Keith Byrd - Go to Keith's Website/Profile

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New Listing! Great Orcutt cul-de-sac Location

Great Orcutt cul-de-sac location! This four bedroom home features one bedroom and bathroom downstairs! All new carpet and paint and some remodeling! New tile in showers and beautiful countertops. Recently remodeled kitchen and cathedral ceilings in the family room. A formal dining room and roomy den create separate areas for entertaining! The lot is HUGE! New front landscaping and nice curb appeal. This one won’t last long!
Wendy Teixeira 805.310.3505

Written by Keith Byrd - Go to Keith's Website/Profile

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New Listing! 3 Bedroom Move-In-Ready

Move in Ready 3 Bedroom 2 Bath Orcutt Home! This wonderful home features new flooring throughout and updated hall & master bathrooms. Remodeled Kitchen includes granite counter tops, stainless steel stovetop, double oven and microwave. French doors open to patio area and huge back yard that is great for entertaining. Large lot with RV parking. Sewer main to street replaced has been replaced, as well water main into home. New Heating FAU, ducting and Air Condition. Great location for Orcutt Schools and 101 Freeway access. ***Information deemed reliable but not verified or guaranteed by broker.***
Shea Hutchinson 805.260.6322

Written by Keith Byrd - Go to Keith's Website/Profile

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CCL Market Update

S&P Corelogic Case-Shiller HPI

Case-Shiller home prices firmed in July, to a 0.3 percent adjusted gain for the 20 city index. The trend is favorable with the year on year rate rising 2 tenths to an unadjusted 5.8 percent and in line with other home price readings which are also roughly at the 6 percent rate. The report is for July and looking at cities in Texas and Florida offers a base comparison for pending hurricane effects in August and September. Dallas was at a 7.4 percent yearly rate in July with Tampa at 7.1 percent and Miami at 5.2 percent. Seattle continues to lead the list at 13.5 percent. Home price are a principal source of growth in household wealth along with stock prices and much less so for wages. But the negative side to strong home price appreciation is the lack of affordability which hurts sales in general especially for first time home buyers.

New Home Sales

Weakness in the South pulled down new home sales in August as it did in last week’s existing home sales report. New home sales fell sharply in the month to a 560,000 annualized rate vs. an upward revised rate of 580,000 in July and downward revised 614,000 in June (revisions total a minus 7,000). Sales in the South, which is by far the largest region for housing, fell 4.7 percent in the moth to a rate of 307,000 for a yearly decline of 9.2 percent. But importantly, sales in the west and Northeast were also lower down 2.6 and 2.7 percent respectively with sales in the Midwest unchanged. September in fact was a weak moth for housing demand, evident in this report’s median price which fell a very sharp 6.2 percent to $300,200. Year on year the median is up only 0.4 percent which, in another negative is still ahead of sales where the yearly rate is minus 1.2 percent. Builders, despite late month disruptions in the South moved house into the market, up 12,000 to 284,000 for a striking 17.8 percent yearly gain. But supply had been so thin that the balance is now at a traditional level, at 6.1 months vs. 5.7 and 5.3 months in the prior two months and 5.1 months a year ago.

Consumer Confidence

Weakness in the hurricane states of Texas and Florida pulled down consumer confidence to 119.8 in September, a level that is still unusually strong. And strength is the message from this report especially the assessment of the labor market as those saying jobs are currently hard to get keeps falling, down 3 tenths to 18.1 percent in a result that will firm expectations for next week’s September employment report. The outlook for the future of the jobs market is no less favorable with those expecting more jobs to open up 6 months from now surging 2.7 percentage points to 19.5 percent.  Another reading of special note is the income expectations which include the effects not only of the jobs market but also housing and the stock market. Here, the spread between optimists and pessimists keeps widening with those awing gains at 20.5 percent vs. 8.3 percent seeing declines. This is a very favorable reading pointing to fundamental confidence in the economy. A possible in the report, though may prove to be only temporary and tied to the effects of the hurricane on gas prices, is a large 4 tenths jump in inflation expectations to a 4.9 percent level that is still softy for this particular reading. Clear weaknesses in the report include downticks in buying plans for houses and autos. But this report is about strength despite the hurricane related downticks in September, the data continues to speak to unusual demand in the labor market and the health of the consumer.

Mortgage Applications

The purchase index rebounded 3.0 percent following the prior week’s unusually steep 11.0 percent loss, lifting the year on year rate a couple of percentage points to plus 4.0 percent. The index has been swinging sharply recently but the overall trend, despite low mortgage rates is soft and hints at further trouble for a housing sector that is mostly stumbling into the year end. Other data includes a second straight steep decline for the refinance index, down 4.0 percent in the week, which offset the gain  on the purchase side to pull the composite down 0.5 percent the week.

Pending Home Sales Index

Existing home sales have been on the decline as signaled all along by the pending home sales index which is down a very steep 2.6 percent in the latest reading which is for August. Hurricane Harvey’s late August hit on Texas didn’t help pending sales in the South which fell 3.5 percent but pending sales show across the board weakness: Northeast down 4.4 percent, Midwest down 1.5 percent and the West down 1.0 percent. Pending sales nationwide are down a year on year 2.6 percent while final sales of existing homes are down 1.7 percent. The pending index has been on a tailspin this year peaking at 112.3 in February and now down at 106.3 for a yearly decline of 5.3 percent. New home sales, along with sales of existing homes, have also been moving lower making for a housing sector that is visibly stumbling into the year end.

 GDP

Second quarter GDP proved strong at an as expected 3.1 percent annualized rate for the third estimate driven by consumer spending at a 3.3 percent rate. Nonresidential fixed investment, at a 6.7 percent rate, was also a strong contributor and offsetting a 7.3 percent decline for residential investment. Government purchases, at minus 0.2 percent, were a slight drag on the quarter while both net exports and inventories were slight positive. GDP prices like other inflation measures were soft, up 1.0 percent overall and 1.1 percent for the core.

Jobless Claims

Hurricane effects are apparent in weekly jobless claims data but are far from overwhelming. Initial claims rose 12,000 in the week of Sep0tember 23rd to a level of 272,000 that is slightly below economists’ predictions. Claims in Texas continue to come down, at an unadjusted 20,169 in the week, roughly double the average but a 1/3 of their peak following Hurricane Harvey’s landfall in late August. Claims in both Florida and Georgia, both hit by Hurricane Irma early on this month , are now on the rise but less catastrophic, with Florida at 18,212 this week vs 10,052 in the week prior, and at 7,917 for Georgia which is up from  4,760. Claims in Puerto Rico, which has since been devastated by Hurricane Maria and where claims are being estimated by the Labor Department, fell to an estimated 2,248 from 2,416. Continuing claims remain very steady and have yet to show any hurricane impacts, at 1.934 million in lagging data for the week of September 16th for a 45,000 decline with the 4-week average at 1.950 million. This average has been roughly unchanged since mid-August. The unemployment rate for insured workers is unchanged at 1.4 percent.

Personal Income and Outlays

The next Federal Reserve rate hike may not be in December after all, based on an unexpectedly weak personal income and spending report that includes very soft inflation readings. Income is the best news in the report as it managed the expected 0.2 percent August gain getting boosts from proprietor income, transfer receipts and also rent. Wages & salaries, in part reflecting a decline in hours, came in unchanged though this follows strong growth in the prior two months. Another weakness in today’s report is a 1 tenth downward revision to overall July income which now stands at 0.3 percent. The savings rate held unchanged in August at a moderate 3.6 percent. Now the bad news, spending  came in at only 0.1 percent as spending on durables, the likely result of Hurricane Harvey’s late  month hit on Texas and related decline in auto sales, fell a very steep 1.1 percent to fully reverse strength in the prior month. Spending on both nondurables and services actually inched forward in August to 0.3 percent each. The inflation readings is where the really bad news a lies. The core PCE price index, the Federal Reserve’s central inflation gauge inched up only 0.1 percent, while the year on year rate fell backwards, down 1 tenth t o1.3 percent for the weakest result since November 2015. Overall prices, likely getting a small boost from a Harvey related spike in gasoline prices, up 0.2 percent6with this yearly rate ,however, also moving backwards , down 1 tenth to 1.5 percent. All these inflation  readings came in no better than the low estimates of economists. Data in this report, after inflation adjustments, arte direct inputs into third quarter GDP and the results will pull down estimates. Real spending fell 0.1 percent in August to cut in half July’s 0.2 percent gain.

 Consumer Sentiment

Consumer sentiment ends this month about where it was at mid-month., at 65.1for September wh9ichg is still strong but down a sizable1.7 points from August. Hurricane effects are likely h behind the easing as respondents in Florida and Texas reported doubts about their financial situation. Yet confidence remains very high with the 9 month average at 96.2, this compared with 91.9 and 92.9 at this time in 2016 and 2015 and is the best score since 2000.Details in the report show a 3.3 point decline for expectations to 84.4 an index that is still up 2.1 percent year on year, and a 0.8 point gain for current conditions to 111.7 which is up a yearly 7.2 percent. Inflation expectations, watched closely by FOMC policy makers remain a negative, unchanged at 2.7 percent despite post hurricane pressures in gasoline prices. Consumer spending hasn’t been showing the kind of strength that consumer confidence readings have, a contrast underscored by the weakness in this morning’s consumer spending data. But the strength of confidence in general including confidence on the business side, is perhaps along with the lack of inflation, the biggest story of the 2017 economy.

Written by Central Coast Lending - Go to Central Coast Lending's Website/Profile
805.543.LOAN info@centralcoastlending.com
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New Listing! Beautiful 4 Bedroom 2 Bath Home


Wow! What a stunning corner home in Traditions! The sellers are so proud of this former model home offering four bedrooms (one downstairs) and a wonderful open and flowing floorplan of over 2200 sq ft of living space. Hand scraped maple flooring, plantation shutters, custom paint and everything you’d want in a forever home. Enjoy the cherry wood cabinets, island/breakfast bar, new appliances, and tons or storage in the kitchen, but you also have a formal dining area for card games or holiday celebrations. The laundry room is upstairs – where it should be – and the upstairs landing area includes desks for home office or school work. Enjoy his and her closets in the amazing master suite…The backyard entertaining areas complete this already picture perfect property and the home even includes air conditioning! Priced to make you smile…and move!
Wendy Teixeira 805.310.3505

Written by Keith Byrd - Go to Keith's Website/Profile

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New Listing! Move-In-Ready 3 Bedroom Home

Great move in ready home with desirable floor plan. This 3 Bedroom 2 Bath home features spacious living room with Vaulted Ceilings & Kitchen with stainless steel range and dishwasher. Slider from dinning area opens to patio and large back yard which includes several fruit trees and two storage sheds. Potential RV Parking. Great neighborhood close to Taylor Elem. and Pioneer HS. Jim May Park nearby with Santa Maria Valley Multipurpose and River trail surrounding. Easy 101 Freeway access. **Information deemed reliable but not verified or guaranteed by broker**
Shea Hutchinson 805.260.6322

Written by Keith Byrd - Go to Keith's Website/Profile

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FOMC Announces the Unwinding of its Balance Sheet

FOMC Meeting

As expected, the FOMC announced the unwinding of its $4.5 trillion balance sheet beginning in October. There is no change to the funds rate which stays at a range of 1.00 to 1.25 percent. For unwinding, the committee is holding to its June statement that will allocate rollover amounts across maturities based on the proportions it holds. Unwinding, which will take several years to unfold, will begin gradually at $6 billion cap (limit) for treasuries and $4 billion for mortgage backed securities. The caps will increase in three month intervals by $6 billion for treasuries and $4 billion for mortgage backed securities until they reach $30 billion per month for the former and $20 billion for the latter. The economic assessment is also steady with job growth said to be continuing and economic growth activity described as moderate. Temporary hurricane effects are cited and include a rise for gasoline prices though the inflation outlook remains unchanged running below their 2 percent goal. Quarterly FOMC forecasts continue to see one more rate hike this year, with median projections unchanged for 2017 and 2018 at three 25 basis point hikes penciled in each year, to 1.4 and 2.1 percent respectively. There is a change to 2019 which is trimmed back to a median 2.7 percent from 2.9 percent with the long run call cut back two tenths to 2.8 percent. Median projections for 2017 GDP growth are up 2 tenths to 2.4 percent with GDP seen slowing to 2.1 percent next year followed by 2.0 in 2019 and 1.8 percent in 2020. The unemployment rate is unchanged from June forecasts at 4.3 percent this year with 2018 and 2019 each cut one tenth to 4.1 percent. Core PCE inflation is cut 2 tenths this year to 1.5 percent and 1 tenth next year to 1.9 percent. The core is seen at 2.0 percent in both 2019 and 2020.

Fed Chair Press Conference

Janet Yellen repeated that this year’s down draft in inflation is likely temporary, the result of one-time factors. She expects inflation to move higher and stabilize around the FOMC’s 2 percent goal, though she did say there are risks that inflation may continue to run below 2 percent. Yet, citing history, she said tightness in the labor market tends to push up wages over time and with that price inflation along with it. On balance sheet unwinding which is set to begin next month, she does not see any adjustments outside of the scheduled path. Yet should the economy significantly deteriorate, she said that the FOMC could change reinvestment caps, stop rolloffs or resume reinvestment. On employment she was pleased with progress and describes the 4.4 percent level as “quite low” and notes special progress among minorities who were hit hardest after the financial crisis.

Written by Central Coast Lending - Go to Central Coast Lending's Website/Profile
805.543.LOAN info@centralcoastlending.com