Hammond Securities LLC. - Single Step Construction Loan

Single Step Construction Loan

Building New Home / Remodeling Home

What is a Single-Step Construction Loan?
A Single Step-construction loan is a combination construction loan and permanent loan. There is only one closing and one set escrow and loan fees. When construction is complete the construction loan converts to a permanent loan with the signing of a Modification of Mortgage form. You may lock-in your interest rate and type of permanent loan you prefer within 30-days of the completion of your home.

What is the term of the Single-Step loan?
Single-Step loans are usually written for nine-months. However, since construction delays are common, you will have the right to loan extensions if needed, upon approval of Hammond Securities. There will be an additional nominal fee for extensions.

What Costs Can be Included in My Single-Step Loan?
All direct costs can be included in the Single-Step loan including architecture, permits, builder fees, land costs as well as direct construction costs provided there is sufficient equity by the borrower.

Does the Equity In My Land Count?
Yes. If you have previously owned your lot for one year or more and there is appreciated value in the lot, this may be sufficient equity for a Single-Step loan. However, there are exceptions to this and a Hammond Securities’ representative can quickly determine what your Single-Step loan amount will be.

Do I Have Monthly Payments During Construction?
No. An interest reserve is included in your Single-Step loan which will cover the interest during construction. When the Single-Step loan is converted to a permanent loan, your first monthly payment will start thirty to sixty days later. However, if the borrower prefers, they may make monthly interest payments during construction.

Can I Include Closing Costs In My Single-Step Loan?
Yes, provided the loan to value ratio is acceptable to Hammond Securities Co., LLC.

What is the “Cost Breakdown” and How Does it Work?
When you or your builder submit the details of the cost of your job, Hammond Securities will prepare a Cost Breakdown form showing the specific line items that will be paid from the Single-Step loan. The borrower and builder must sign and approve the Cost Breakdown prior to closing. Often estimated costs change during construction and Hammond Securities will endeavor to accommodate these changes by altering line items or in some cases increasing the Single-Step loan.

How Do Construction Draws Work?
When work has been completed or materials have to be purchased, the borrower or builder will submit a draw form provided by Hammond Securities. The borrower or builder will request what expenses are to be drawn and from which line items. Hammond Securities will inspect the job and then wire transfer the appropriate amount of funds to the borrower (If the borrower agrees in writing, Hammond Securities will wire funds directly to the builder.). Usually draws are made monthly. However, you may order as many construction draws that you deem necessary. There is an inspection fee charged for each draw.

How Do I Get Started On My Single-Step Loan?
The best suggestion is to call a Hammond Securities representative toll free at 888-299-8009. Your construction needs will be discussed and terms will be proposed. Next you will be sent a loan application which will qualify you for a Single-Step loan and a permanent loan. Whatever forms your construction costs are on is OK for us. We’ll transcribe your information to our forms. If all seems reasonable an appraisal will be ordered and an escrow will be opened (Hammond Securities will manage this for you.).

How Long Does This Process Take?
Once Hammond Securities has you loan application and cost breakdowns we can issue a loan approval within three days subject to appraisal and title information. Appraisals can take one to three weeks (sometimes longer). So, assuming an appraisal takes two weeks, Hammond Securities can fund your Single-Step loan within two weeks from the time we receive your application and cost breakdown.

How Is Interest Charged During Construction and What Kind of Permanent Loan Can I expect?
The interest rate during construction floats and is set at a margin over the Prime Rate. When construction is nearing completion (thirty to forty-five days prior to obtaining a Notice of Completion) Hammond Securities will provide you terms for the various types of permanent loans. Hammond Securities is an approved Fannie Mae, Freddie Mac, HUD and VA lender and offers fixed rate, adjustable rate, and all common types of permanent loans at competitive rates.

Single Step Construction Loan Building New Home / Remodeling Home
What is a Single-Step Construction Loan? A Single Step-construction loan is a combination construction loan and permanent loan. There is only one closing and one set escrow and loan fees. When construction is complete the construction loan converts to a permanent loan with the signing of a Modification of Mortgage form. You may lock-in your interest rate and type of permanent loan you prefer within 30-days of the completion of your home. What is the term of the Single-Step loan? Single-Step loans are usually written for nine-months. However, since construction delays are common, you will have the right to loan extensions if needed, upon approval of Hammond Securities. There will be an additional nominal fee for extensions. What Costs Can be Included in My Single-Step Loan? All direct costs can be included in the Single-Step loan including architecture, permits, builder fees, land costs as well as direct construction costs provided there is sufficient equity by the borrower. Does the Equity In My Land Count? Yes. If you have previously owned your lot for one year or more and there is appreciated value in the lot, this may be sufficient equity for a Single-Step loan. However, there are exceptions to this and a Hammond Securities’ representative can quickly determine what your Single-Step loan amount will be. Do I Have Monthly Payments During Construction? No. An interest reserve is included in your Single-Step loan which will cover the interest during construction. When the Single-Step loan is converted to a permanent loan, your first monthly payment will start thirty to sixty days later. However, if the borrower prefers, they may make monthly interest payments during construction. Can I Include Closing Costs In My Single-Step Loan? Yes, provided the loan to value ratio is acceptable to Hammond Securities Co., LLC. What is the “Cost Breakdown” and How Does it Work? When you or your builder submit the details of the cost of your job, Hammond Securities will prepare a Cost Breakdown form showing the specific line items that will be paid from the Single-Step loan. The borrower and builder must sign and approve the Cost Breakdown prior to closing. Often estimated costs change during construction and Hammond Securities will endeavor to accommodate these changes by altering line items or in some cases increasing the Single-Step loan.	How Do Construction Draws Work? When work has been completed or materials have to be purchased, the borrower or builder will submit a draw form provided by Hammond Securities. The borrower or builder will request what expenses are to be drawn and from which line items. Hammond Securities will inspect the job and then wire transfer the appropriate amount of funds to the borrower (If the borrower agrees in writing, Hammond Securities will wire funds directly to the builder.). Usually draws are made monthly. However, you may order as many construction draws that you deem necessary. There is an inspection fee charged for each draw. How Do I Get Started On My Single-Step Loan? The best suggestion is to call a Hammond Securities representative toll free at 888-299-8009. Your construction needs will be discussed and terms will be proposed. Next you will be sent a loan application which will qualify you for a Single-Step loan and a permanent loan. Whatever forms your construction costs are on is OK for us. We’ll transcribe your information to our forms. If all seems reasonable an appraisal will be ordered and an escrow will be opened (Hammond Securities will manage this for you.). How Long Does This Process Take? Once Hammond Securities has you loan application and cost breakdowns we can issue a loan approval within three days subject to appraisal and title information. Appraisals can take one to three weeks (sometimes longer). So, assuming an appraisal takes two weeks, Hammond Securities can fund your Single-Step loan within two weeks from the time we receive your application and cost breakdown. How Is Interest Charged During Construction and What Kind of Permanent Loan Can I expect? The interest rate during construction floats and is set at a margin over the Prime Rate. When construction is nearing completion (thirty to forty-five days prior to obtaining a Notice of Completion) Hammond Securities will provide you terms for the various types of permanent loans. Hammond Securities is an approved Fannie Mae, Freddie Mac, HUD and VA lender and offers fixed rate, adjustable rate, and all common types of permanent loans at competitive rates.