GSF Mortgage Corp. recently announced its new Single Close Construction Loan program, which it says will speed up the construction loan process and could even solve some of the housing inventory issues.
The new single close program will transform an otherwise tedious process to a more simple and efficient one. The company explained it is a low down payment option that allows homebuyers to build their own home, thus avoiding issues such as the lack of housing inventory.
Currently, GSF Mortgage has approved more than 60 builders to offer the program.
“We’re able to create inventory and create options for borrowers, and they’re building their first home instead of buying,” GSF Mortgage President Chad Jampedro said. “A home is a lot more than a structure held together by wood and nails. It is a part of the world stage that holds your stories, your memories and your milestones.”
While traditionally, buyers would need to go through several stages of construction lending such as the pre-approval, commitment, interim lending and permanent loan stages, this new program combines all of them.
Borrowers will now be able to obtain permanent loan approval in one transaction and even close the transaction before construction even begins.
The program includes low down payment options through the Federal Housing Agency, the U.S. Department of Veterans Affairs and the U.S. Department of Agriculture.
And other companies are also looking to change up how construction lending is performed. Last year, Fannie Mae announced that it could be on the verge of introducing a pilot program to change the way it buys residential construction loans. Under the new program, Fannie Mae would buy the loan on the first day of construction, possibly making the loan easier to get and cheaper. The borrower wouldn’t begin making payments until after they moved into the home.