Building your own home is an exciting journey, but the financing side can feel overwhelming without the right information. Whether you are buying land or already have a future homesite in place, having a Construction-to-Permanent loan program designed for new construction can help make all the difference.
A Construction-to-Permanent Loan, often called a Construction Perm Loan or CP Loan, is a single loan that combines construction financing and a permanent mortgage into one loan. This approach may offer several benefits, including streamlined financing and potentially reduced upfront expenses, providing a clear financial roadmap through every stage of the process.
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What is a Construction-to-Permanent Loan?
A Construction-to-Permanent Loan provides financing for both the construction phase and the long-term mortgage. During the build, funds are released in stages as key construction milestones are completed. Once construction is complete, the loan changes or modifies into a permanent loan. This structure bridges the gap between construction financing and separate “end loan” (permanent) financing. Construction Perm Loans help you avoid having to pay two sets of closing costs, simplifying the process and potentially saving you money.
How Do I Qualify for a Construction-to-Permanent Loan?
Qualifying for a Construction-to-Permanent Loan generally starts with a review of borrower and property requirements, including the borrower’s financial profile, the type of property being built, and the scope of the construction project. In most cases, a builder is required before applying for a Construction Perm Loan. Lenders typically need the borrower to provide a contract with a qualified builder, along with construction plans and a cost breakdown, to review and approve the loan. While some programs allow early conversations before a builder is finalized, final approval usually requires a selected and approved builder.
Construction-to-Permanent Loans can provide flexible financing options for qualified borrowers. Programs may be available through FHA, VA, and Conventional loan types, which may allow for higher loan-to-value ratios compared to some traditional construction financing, subject to program guidelines and borrower qualifications. Borrowers may be able to finance both the land and construction in a single closing, whether purchasing a lot or building on one already owned – even if the lot is currently financed.
In some cases, existing lot equity may be used toward down payment and closing costs, helping to reduce upfront expenses and improve overall affordability. Program availability may depend on the property location and/or construction term. See your Mortgage Loan Originator for details.
What Are the Benefits of a Construction-to-Permanent Loan?
One of the main benefits of a Construction-to-Permanent Loan is that you can access money for construction and the long-term home purchase all in one loan. If you are looking to build your own home on land that you already own or would like to purchase, a Construction Perm Loan may be an option. This type of loan can help to streamline the purchase process and save you money on closing costs among other expenses. By combining the land and home purchase, you can avoid going through multiple banks, appraisals, financing terms, and payments, consolidating all of the elements of your project into one easy-to-manage loan.
At Acrisure Mortgage, Construction-to-Permanent Loans offer borrowers a more streamlined and efficient financing experience by keeping key parts of the process under one roof. When processing, underwriting, closing, and funding are handled internally, it may help reduce delays and support clearer communication throughout each phase of the loan. Borrowers may also benefit from working with a lender that has both local market knowledge and national reach, along with dedicated construction administration teams that manage draw requests and help keep projects moving forward.
Construction-to-Permanent Loan Financing
During a Construction-to-Permanent Loan, financing is provided in two phases to support both the building process and long-term homeownership. The construction phase focuses on funding the build itself, with loan proceeds released through a structured draw process tied to land value and construction progress. Instead of receiving the full loan amount upfront, funds are disbursed at key milestones, such as: site preparation, foundation, framing, and final completion. Draw schedules, inspections, and disbursement timing are subject to lender requirements and program guidelines.
Once construction is finished, these funds are usually paid directly to the builder or vendors after inspections confirm that specific construction milestones have been completed properly. All costs must be documented, approved upfront, and aligned with the construction plans and contract.
Upon completion of construction, the loan transitions into the permanent phase and converts to a traditional mortgage. At this point, borrowers move from construction-related payments to regular principal and interest payments, providing a clear and organized shift from building the home to financing it long term.
The phased approach of a Construction-to-Permanent Loan helps keep projects on schedule while offering a streamlined path from construction through completion. Understanding how these phases work can help borrowers better prepare for the construction process and what to expect at each stage.
Why Choose a Construction-to-Permanent Loan?
A Construction-to-Permanent Loan can be a powerful financing solution for borrowers looking to build a home while simplifying the lending process. By combining construction financing and a long-term mortgage into one, this loan can help reduce costs and provide greater clarity throughout each phase of the build. Whether you’re purchasing land, building on a lot you already own, or exploring custom home financing for the first time, understanding how Construction Perm Loans work can help you plan with confidence.
If you’re considering building a home and want to explore your options, speak with a licensed Mortgage Loan Originator. They can walk you through available programs, review qualification requirements, and help you take the next step toward turning your vision into a finished home.
Construction-to-Permanent loan programs, terms, and availability vary by borrower qualification, property type, and location. Not all applicants will qualify. FHA, VA, and Conventional programs are subject to agency guidelines and lender approval. This content is for informational purposes only and is not a commitment to lend. Speak with a licensed Mortgage Loan Originator for specific program details.
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About Acrisure Mortgage
Acrisure Mortgage (formerly FBC Mortgage, LLC) is a Top 10 national mortgage lender headquartered in Orlando, Florida. Licensed in 49 states and supported by more than 19,000 dedicated professionals across Acrisure, we specialize in residential mortgage lending through both retail and wholesale/correspondent channels. Our comprehensive offerings include purchase, refinance, construction and renovation loans—tailored to meet the unique needs of homebuyers, homeowners and partners nationwide.
We are proud to serve as a trusted partner to many of the nation’s largest homebuilders and real estate professionals, with a strong foundation of loyal, satisfied clients. Recognized for our commitment to service, innovation and operational excellence, Acrisure Mortgage has received numerous national accolades, including Top 50 Mortgage Companies, Best in Loan Delivery and Best Place to Work honors.
As part of the Acrisure family, we are backed by a global fintech leader that shares our values of innovation, integrity and service. Together, this empowers us to expand our capabilities, leverage world-class technology and resources, and grow alongside the clients and communities we serve.
All information presented is for educational purposes only and not intended as financial advice. NMLS ID#152859 EHL ©2026.
How Construction-to-Permanent Loans Work
A Construction-to-Permanent Loan, often called a Construction Perm Loan or CP Loan, is a single loan that combines construction financing and a permanent mortgage into one loan.
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