Construction Loans FAQ


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A construction loan is a reimbursement loan
and not an advance
unless if a specific deposit is required by a supplier
in which case an advance is made.

  » When does the construction loan term begin?

   The Construction loans typically have a 12 month term which begins on the date the borrower signs the loan documents.

» How do you know where to wire the funds?

   At loan closing, the borrower signs a Construction Disbursement Account Information form that describes the bank account that is going to be used, we recommend opening an account specifically for the project.
Should there be a change to the checking
 account; the borrower must notify


 Construction Lending immediately in writing.

» Who does the borrower contact to request funds?

   Each construction project is assigned to a CTP Customer Service Team whose contact information may be found by visiting the web site "My Loan Information." Also the borrower will receive a Welcome Packet with important information about the loan process and how to contact us.

» How quickly can the initial draw request get processed?

   The CTP Customer Service Team will be able to start processing the initial draw request two business days after the loan funds. It takes approximately two business days after the loan funds for the loan information to be transferred to our Loan Servicing Department. A borrower's loan information can be conveniently accessed online, "My Loan Information" within 48 to 72 hours of funding.

» How much can the borrower get for start-up costs?

   The borrower can request start-up funds to help get the construction project going. We will disburse 5% of the current construction amount. We will also disburse funds for upfront expenses such as permits and utility connections upon verification. We will not make another disbursement until the home is 10-15% complete and a copy of the permit is received.

» Can the borrower get reimbursed for pre-paid items?

   By detention, pre-paid items that are reflected on the budget and used as equity contribution are not reimbursable. The borrower can be reimbursed for items that have been pre-paid that are not in the budget as equity items.

» What are hard costs?

   Hard costs are direct costs associated with the labor and materials used for the actual construction of the home. Hard costs are also known as "direct costs", "board and nails”, "on-site costs" and "hard cost improvements." Hard costs are disbursed based on an inspected percentage of the overall completion of the project rather than the items allocated in the budget.

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