New Horizons Construction Group has been able to provide construction financing products in a manner which is easy and comfortable to understand.  It is important to us that the consumers feel secure and fully understand the process at hand.  Therefore, our line of products and services are accessible, competitive, and tailored to every individual person and their needs.

- Construction to Permanent Loans (CTP)

This program is designed for the borrower who wishes to obtain a first mortgage loan to construct or rehabilitate a primary residence, second home or an investment property and obtain permanent financing. The program provides for both a construction and permanent loan.

The borrower signs one set of loan documents that cover both the interim construction phase and the permanent loan phase. The borrower may choose from several loan products (Fixed and ARM) and rate lock options that offer a variety of features.

The construction period can vary in length between 6, 9 and 12 months. Additionally, construction periods of 15 and 18 months are available for the 1-year Treasury ARM product. During the construction period, the loan will be interest only with interest payments paid from an interest reserve account. When the home has been completed, the loan will be converted to a permanent mortgage.

This way the borrower locks in an interest rate upfront and only has to pay closing costs for one closing.  Now you can become the Developer!

Construction Loan Process

The processing of a Construction-to-Permanent Loan is very similar to the processing of a standard purchase or refinance transaction. There are just a few extra steps to complete so that a proper analysis of the loan request can be made.

Unlike a purchase transaction for an existing home, a Construction-to-Permanent Loan involves determining the value of a housing unit that is not yet constructed.  This is called a subject to completion appraisal, which takes in to account the plans and specifications and then compares those to the actual homes within that specific area.

To assist the appraiser and the lender in determining the value of the home after it is built, information must be provided on the improvements, what materials are to be used and the total costs to complete construction.

New Horizons Construction takes care of the entire process and insures that all these things are performed in a timely manner.

Construction to Permanent (CTP) Breakdown of Costs

Total Project Costs

This is the cost to complete the home and consists of soft costs, hard costs, land value, closing costs, contingency and interest reserves.

Soft costs:Permit fees, engineering fees, architectural fees and other costs associated with building the home but not directly a part of the actual construction costs. Many times the borrower has already paid some of these costs. To consider these paid items as "equity," the borrower must document the cost with a bill and a canceled check or a paid receipt.

Hard costs:The actual cost of construction covering all materials and labor associated with the building of the home. Typically the borrower will enter into a contract with a contractor to build the property. Like a purchase contract for an existing home, this contract will set forth the work to be done and the costs associated with that work. All contracts must be for a fixed price; "Cost Plus" contracts are not acceptable. To support this cost, we require a signed and dated copy of the contract along with a detailed Line Item Cost Breakdown prepared by the contractor. All contracts and budgets must be reviewed by, and contain terms acceptable, to standard lending guidelines.

Closing Costs:Costs associated with the closing of the loan (e.g., title costs, loan fees, discount fees, inspection fees, appraisals, etc.)

Contingency:In certain circumstances a reserve account will be needed to cover unforeseen cost overruns in the construction of the home. A required 5% of the hard costs will be established in the Contingency Account (Contractors may hold a reserve other than what usually required by the Lender.) 

Interest Reserve:At loan closing, an account is established to pay the estimated interest costs during the construction of the home. Since the borrower is only charged interest on the amount of funds disbursed, an estimate of the average disbursed amount is made. Our construction specialists will estimate that, on average, 60% of the loan amount will be disbursed during the term of the construction period. This interest reserve account is paid up front and is held to pay the interest during the time of construction.

Construction Process

In all, New Horizons Construction has put the system in place to be able to handle the entire process from start to finish.  Our commitment is to see every individual project through, whether it is a 1,000 home project or the construction of a simple addition.  We will guide you through it all, which will allow you, the consumer, to experience a pain free construction process.

We excel at creating the ultimate building experience!

- Bridge Loans

Bridge loan second mortgages is a loan program which permits a homeowner to access equity in a current owner-occupied residence (which is intended to be sold) to use for the down payment requirements on a Construction-to-Permanent Loan. Both loans must be provided by the same lender and close concurrently.

This program has been created to allow a borrower to access funds from his equity to complete a construction project without having to sacrifice his savings or liquid reserves.  This flexibility allows the consumer to maximize on all the options available.