The new home construction market today is responsible for more than 100,000 newly built homes per year. Fannie Mae supports that activity with two types of financing: Single-Closing and Two-Closing Transactions.
C-to-P financing can help lenders grow their business by closing the gap in housing supply in the communities in which they operate.
Single-closing transactions allow lenders to underwrite and close on a construction loan and permanent financing at the same time using one set of closing documents, making it convenient for lenders. This benefits borrowers because it’s:
Please Note: The lender is responsible for managing the disbursement of the loan proceeds to the builder, contractor, or other authorized suppliers. The lender may use a third party for this function, though the lender remains responsible for overseeing the third party and ensuring all required steps are fulfilled.
Often a customer will come to a lender with an existing construction loan that needs to be converted to a mortgage loan. In that case, lenders would use a two-closing loan, which roll’s the construction loan into the permanent mortgage. The construction loan can come from any lender and, in this case, the borrower will have been through two-closings (one closing on the construction loan and the second closing on a mortgage).
This flexibility allows borrowers to shop for the best terms on their construction loan without having to commit to terms with their mortgage lender upfront, and two-closing transactions allow for more flexibility in eligible products.
|Multistate Construction Contract (Form 3734): PDF||Single-Family - Fannie Mae HomeStyle Model Document|
|Multistate Construction Loan Agreement (Form 3735): PDF||Single-Family - Fannie Mae HomeStyle Model Document|
|Multistate Riders and Addenda (Form 3737): PDF||Single-Family - Fannie Mae Uniform Instrument|
|Multistate Riders and Addenda (Form 3738): PDF||Single-Family - Fannie Mae Uniform Instrument|
|Form 1004D||Appraisal Update and/or Completion Report|
|Form 3161||Loan Modification Agreement (Providing for Adjustable Interest Rate)|
|Form 3179||Loan Modification Agreement (Providing for Fixed Interest Rate)|
|Special Purpose Documents||Find model legal documents that have been developed for a special purpose.|