Single close vs. two-time close
A two-time-close construction loan funds the build, then you refinance into a permanent mortgage when the certificate of occupancy is issued. That is two applications, two underwrites, two sets of fees, and rate risk at conversion. A one-time-close construction-to-perm underwrites the permanent loan up front. During construction you typically pay interest on funds drawn. At completion the loan modifies or converts to the permanent principal-and-interest payment you locked.
Custom means plans, specs, a builder the lender will approve, a contingency reserve, and an appraisal that can support the as-completed value. Spec inventory from a production builder is a different conversation. Cost overruns are not a website feature; they are a draw-schedule problem we talk about before you break ground.
What has to be true
Land may already be owned or purchased in the same transaction, depending on the lender. Lot equity can count toward down payment on some programs. The builder generally needs to be licensed, insured, and acceptable to the investor—owner-builder files are narrower. Rate-lock windows on construction are longer than a 30-day purchase lock and price accordingly.
We broker OTC construction; we do not promise every overlay, every builder, or every rural well/septic combination. Conventional construction-to-perm, jumbo construction, and VA construction (see the VA custom construction page) are different boxes. An independent broker exists so those boxes get compared instead of handed to you by the builder’s preferred lender.