A construction to perm loan is two loans under one closing, a construction loan and a permanent loan. During the construction phase interest is paid only on the amount drawn for the construction of the home. 

After the construction phase is completed, the loan is modified into permanent financing. (Modifying means signing of a "new note" to pay the total amount of the loan received) 

A "Purchase Rehabilitation" loan is also available. The loan amount is based on the purchase contract plus the amount of repairs, with an appraisal  subject to repairs being completed. At closing the seller is paid and the remaining funds are held for the rehab of the Loan-in Process account.  

The builder can began breaking ground at the closing of the construction/perm loan. If there is a realtor involved, they are usually paid at closing. Closing cost can be included in the cost to build, or the builder may pay the borrowers closing cost. The borrowers start making payments after modification. Please call the Home Team with any question you might have.