Building a home is exciting — financing it is where things often feel confusing. A construction-to-perm loan (also called a one-time close construction loan) is designed to simplify that process by combining construction financing and permanent financing into one loan.

Here’s how it works in North Carolina.

Step 1: One Loan, One Closing

Instead of taking out a short-term construction loan and refinancing later, a construction-to-perm loan closes once at the beginning. That means:

• One set of closing costs
• One approval process
• No second underwriting after construction

Step 2: Construction Phase

Once the loan closes, funds are released to the builder in stages called draws. Draws correspond to construction milestones (foundation, framing, drywall, completion, etc.).

During construction:

• You typically make interest-only payments
• Payments are based only on funds that have been drawn
• Inspections are completed before each draw is released

Step 3: Conversion to Permanent Mortgage

After the home is complete and receives a Certificate of Occupancy, the loan automatically converts into a standard mortgage — usually a 30-year or 15-year fixed, or ARM.

No re-qualifying. No re-closing.

What Makes NC Construction Loans Different

North Carolina construction lending is more documentation-heavy than many borrowers expect. Builder approval, detailed plans, specs, contracts, and timelines all matter. Working with a lender who does this regularly makes the difference between a smooth build and a stalled one.

Bottom Line

Construction-to-perm loans are powerful, but only when structured correctly from day one. The earlier the lender is involved, the smoother the entire build becomes.

We’re here to help when you’re ready. Call (336) 575-9448 to get started today!