Florida VA, FHA & VA Jumbo Construction Builder Approval Process.Builders Let us help you sell more homes with our FHA & VA One-Time Closing Construction Loan allows the lot purchase and a permanent 30 year fixed rate loan all wrapped in one. The process takes about 90 days from start to finish and we allow the builder up to 8 months to complete the construction.
- Primary Residence only
- Single Family Homes only
- Florida only
- Borrower can not perform any of the work
- Minimum Loan amount $175,000
Our One-Time Closing FHA & VA Construction Loans require 2 approvals, one is the buyer's mortgage loan and the second is the builder's approval.
The buyer makes no payments during the construction process and the Builder is required to include certain construction loan fees listed below into their cost of building the home. The company that provides the construction funding is NCF and here are their fee's.
These fees can NOT be charged to the borrower and MUST be charged to Builder and included in the FINAL sales price of the home or be absorbed by the Builder.
- Construction Admin Fee is 2.25% of loan amount.
- Construction Underwriting Fee is $250.
- Construction Closing Coordination Fee is $275.
- Construction Inspection Fee is $750.
- Interim/Construction Interest Rate*: Currently at 8.00% This is not the permanent interest rate of the borrower’s loan, it is the interim interest rate accruing on disbursed construction funds only.
These fees are not much more than a conventional construction loan. Most lenders charge 1% to 2% origination points with very similar constitution fee's and the construction interest rate is usually around 5%. Plus you get a 30 year fixed loan and not an adjustable rate mortgage.
Here are the steps for our FHA & VA Construction Building & Builder Approval Process.
STEP 1: Builder Makes Application to get approved by NCF.
- Disbursement Instructions
- Copy of Contractor’s License
- Evidence of General Liability Insurance
- Evidence of Worker’s Compensation Insurance
- Evidence of Builder’s Risk Insurance
- Most recent two years tax returns
- Year-to-Date Profit & loss statement and current balance sheet
- Executive Summary providing an overview of experience
- Click here to open the Builder application and necessary forms
Please email all of the items above and the completed builder application to info@FirstFLFinancial.com
When we have all the required builder documents we submit your Builder application to NCF for the builder approval.
STEP 2: Construction Sales Contract, Builder or you provide us with the “Preliminary" Contract/Purchase Agreement.Which we will submit to NCF so they can calculate the construction loan fees that will be included in the sales price.
STEP 3: Construction Cost/Sales Price Calculation
NCF will then give us the NEW sales price which will include all of the construction fee's that need to be included in the builder's FINAL Contract/Purchase Agreement and then the builder will provide us with the signed FINAL Contract/Purchase Agreement with the construction loan fees included.
STEP 4: Builder to Provide us with, Detailed cost breakdown
STEP 5: Underwriting
We will submit the file for underwriting of the construction funding and the borrowers FHA loan.
STEP 6: Closing
At the closing the land seller or the mortgage will be paid off with the initial draw, there is no initial draw to the Builder at the closing before any work is in place and after a three business day cooling period the Builder can be reimbursed for any site permit related expense with notification and documentation.
STEP 7: Post-Closing / Construction Begins
A Letter of Commencement will be sent to the Builder by NCF informing you the loan has closed and construction can begin. This letter details the instructions on how and when to request the draws. NCF will also at this time provide to the Builder a list of specific items and forms that will be required to be submitted prior to the release of the final draw
STEP 8: Construction Draw Procedures
Builders can receive up to five draws, upon request by the Builder for a construction draw, NCF will immediately order an inspection of the construction project. Upon receipt of the report, NCF will match the report with the Home Construction Cost Breakdown to determine the draw amount. All draws are based on a line item percentage completion and NCF will have the funds wired to the settlement agent and simultaneously provide Disbursement Instructions to the Settlement Agent for further disbursement to the Builder.
It’s up to the Builder’s discretion when or if they take the interim draws. Line-Item Percentage of Completion Method used to determine draw amounts for site improvements and Interim draws are to be used to pay for site improvements/construction in place. Collateral inspection required when a draw for site improvements/construction in place is requested. NCF will order/pay for the collateral inspection
NCF will fund up to 90% of the Builder’s Contract Price prior to the Final Draw, provided the work is in place.
The final draw will fund all remaining completed improvements and will be funded once received and the Lender has approved all remaining funding conditions. Builder to advise NCF Construction Servicing Dept. when the project is complete so NCF can order the final inspection from the HUD fee inspector. NCF will pay for the final inspection when required and any cost for failed inspections will be deducted from the Builder’s Final Draw.
STEP 9: Construction to Permanent Loan Rollover
When all funding requirements have been met and received by NCF and the Lender, NCF will then forward final Disbursement Instructions to the Settlement Agent for disbursal of the final draw to the Builder and all remaining obligations. Once all funds have been fully disbursed, the file is complete. The borrower(s) will begin making their payments on the date established.
VA Builder Approval & Sign Up Information
Builders that are not approved by VA need only to register with VA to obtain a VA Builder ID number. Thus, there is no lengthy processing time and in most cases, an ID number can be issued within a day or two.
To obtain a Builder ID number, three items need to be submitted to the Construction and Valuation unit of the local VA Regional Loan Center having jurisdiction over the area in which the builder will construct property. These items are:
Information concerning VA Builder ID number requirements can also be found in the VA Lender's Handbook (VA Pamphlet 26-7), section 10.07, page 10-14.
We offer loans for the entire state of Florida and all of the following cities;
Monroe County Florida Cities; Big Pine Key, Islamorada, Key Colony Beach, Key Largo, Key West, Long Key, Marathon, Marathon Shores, Sugarloaf Shores, Summerland Key, and Tavernier
Collier County Florida Cities; Marco Island, Naples Golden Gate, Lee County Florida Cities: Alva, Boca Grande, Bonita Springs, Buckingham, Captiva, Cape Coral, Fort Myers, Fort Myers Beach, Lehigh Acres, Sanibel. Jacksonville, Tampa, Saint Petersburg, Hialeah, Orlando, Fort Lauderdale, Tallahassee, Hollywood, Pembroke Pines, Miami, Palm Beach, West Palm Beach, Boca Raton, Miramar, Sarasota, Gainesville, Bradenton
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