Owner-Builder Construction Loans can be done with the 100% construction loan program, the construction loan program, the investment construction loan program, and the construction permanent loan programs. All owner-builders must be using COBS Homes Owner-Builder Services prior to closing the construction loan and during the construction period.. Owner-builder construction loans do not require a general contractor or builder.
Speak with a Construction Loan Specialists now: (888) 590-7466
There are certain requirements that must be met in order to proceed as an Owner-Builder, they are as follows:
Owner-Builder Construction Loans will require a building lot with a site plan or plot plan that shows all the property, proposed new house, and all other building lot features.
A complete construction budget must be developed, including major bids for materials and labor. A complete material take-off with pricing for building materials must also be completed. The proposed, reasonable, amount of sweat equity should be included in the budget.
Owner-builders must prove that the building lot is a legal and approved building lot. This requires that the plans and building department permit submittal requirements have been met.
It is the responsibility of the owner-builder to verify with the local building department that their plans adhere to local building codes and that permits to construct a new home can be obtained.
Owner-builder loans also require Builder Risk Insurance and in some cases general liability insurance. Only licensed and insured subcontractors can be used to perform labor on the new home project.
A satisfactory appraisal for owner-builder must show equity in the future new home in conjunction with the total cost to complete the project.
The maximum loan amount will be determined by the cost to complete construction, your cash down payment, and the appraisal value.
Note: In order to qualify for an owner-builder construction loan, your current home mortgage can be omitted from the qualifying debt-to-income ratios if an intent-to-sell letter is completed, which means that you plan to sell the current home after you complete the new home construction.
Other features of the Owner-Builder Construction Loan:
Land purchase and lot payoff are allowed to be rolled into the new construction loan.
Loan closing costs are allowed to be rolled into the new construction loan.
Interest Reserves are required to be in the construction loan so you have "no-cash-out-of-pocket" feature during construction.
A construction contingency is required to be included in the construction budget and construction loan.
Charter Funding Construction Loans
5825 Avenida Encinas, Suite 101
Carlsbad, CA 92008
(888) 590-7466 office (760) 269-3123 fax www.cfconstructionloans.com
