Construction-to-Permanent Financing

C-to-P financing allows lenders to replace interim construction financing the borrower used to construct a new residence with a long-term mortgage that can be delivered to Fannie Mae. C-to-P financing can be used for site-built or manufactured homes (MH).

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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

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:

  • Affordable: Borrowers only have to pay for one closing, and they can lock in their permanent interest rate then. If interest rates drop during construction, they can receive the lower interest rate when the loan is converted to a permanent mortgage.
  • Convenient: One closing means only one appointment to sign the closing paperwork for both construction and mortgage loans.
  • Flexible: Whether a borrower is building a site-built home or installing MH, C-to-P loans allow them to create customized solutions at any scale.

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.

Get Started with Single-Closing C-to-P

Two-Closing Transactions

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.

Learn More About C-to-P Financing


Form Title
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.