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Builders offer buyers new home loan incentives.


Incentives are often given buyers when they work with builders in-house new home loan company.  These incentive are usually thousands of dollars.  This new home loan incentive is always given as a credit toward the buyers closing cost. The incentive is not typically offered the buyer if they do not use the in-house lender for their new home loan.  New home buyers who need financing rarely look for alternative new home loan options when the builder offers such strong incentives.

In Florida there is no rescission period for new single family home contracts.  Florida Statute 718.503 does provide a 15 day rescission period for new condominium buyers and 3 days for re-sale condominiums.

Most new home track builders like Pulte and Lennar offer buyers in-house new home loan only requiring the buyer provide the down payment.  Although, additional money may be required from the buyer for upgrades and options during the option selection process.   The buyer begins the loan process as soon as they enter into the new construction purchase contract agreement.  The loan is not finalized until the home is completed.  This is know as an end loan.  The required down payment depends upon the type of loan the buyer qualifies to obtain.   Down payments vary from  5% to 20%.  The money is required at the time of or within a few days of signing the new home purchase contract.  The down payment and option money is almost never held in escrow.  The builders request the buyers sign waivers of escrow so they can use the money during the construction process.

Custom home builders and luxury home builders typically require the buyer to obtain a construction perm loan.  This is a new home loan were the money is provided in increments during the construction process.  When the home is completed it converts to a permanent loan.  This type of new home loan is complicated.

I have asked Shane Hulslander, Credit Analyst with Aileron Mortgage, phone 239-331-5600, to provide an explanation of the new home loan construction permanent process.  Shane has many years experience with financing and can assist with you with ALL your financing needs anywhere in Florida.

Construction Loan Programs

Available Options:

5/5 ARM Conventional   | 5/5 ARM Mini Jumbo | 5/5 ARM Jumbo

Builder Approval

You are credit-approved for a construction loan! Great!! Congratulations!! Now we have to get your builder/contractor approved. Provide your Home Loan Specialist with a completed Builder Package. The package contains the following information we need to review and approve your builder/contractor.

  • Required Builder package includes:
    • Completed/Executed Contractor Profile Form
    • Sign-off on Draw Schedule
    • State Contractor’s License
    • Declaration Page Commercial General Liability Insurance with $1M in coverage with commercial Liability. If not available, personal liability policy referencing subject property.
    • Declaration Page Worker’s Compensation Insurance, if Contractor has employees
    • Contractors Driver’s License
    • Completed W-9

Once we have received the completed Builder Package, please allow 72 hours for review.

Plans & Specs

Fantastic!! Your builder has been approved!! Now we need to have access to the full plans and specs for your dream home. As we process your loan, we will need to order an appraisal that is subject to the completion of your home. The plans and specs will come in handy for the appraiser to accurately assess the value of your home. An electronic copy of them will be ideal, providing them early to your Home Loan Specialist will help move things along with your appraisal.

How our Construction Loan Works

The Construction Loan is available for construction of single-family residences. It offers a 12-month “draw period” where the lender will disburse funds at the request of your builder for work completed according to the established draw schedule. An inspection to ensure that the builder has complied with the draw schedule will be requested prior to disbursing funds. The draw checks will be made payable to you and the builder unless instructed otherwise in writing. The final draw check will always be made payable to builder and member with no exception.

During the draw period, the owner is responsible for the monthly interest-only payments. The payments are based on the balance of the funds disbursed.

Once the home is completed, after receipt of the certificate of occupancy and the final inspection, your construction loan will transition to the permanent mortgage loan. At that point, you may lock in your permanent loan’s rate.

We will need proof of homeowner’s hazard and flood insurance coverage, if applicable, along with documentation that the premium(s) are paid in full for one year.

Construction Period and Extensions

  • If construction is not complete within the 12-month construction period, a 90-day extension maybe available on a case by case basis. The loan may be extended a maximum of two times. Extensions are not automatic and are granted at Management’s discretion. Modification and recording fees will apply and are due and payable at the time of extension.
  • At the end of the construction period, if the construction is not complete, Principal and Interest payments will be collected on the ‘total loan amount’ financed until construction is completed.

The construction loan cannot convert to permanent loan prior to receipt of occupancy and final inspection.

Rates & Fees

  • Construction Rate and Construction Conversion Fixed Rate are posted on the daily rate sheets
  • ARM rates will be available from the Rate Lock Desk
  • Modification fee, $250.
  • Conversion fee, $500.
  • Recording fees, vary by county


    • Certificate of Occupancy and Final Inspection are required at completion of Construction in order to exercise the conversion option or to modify the construction loan rate to the permanent financing rate.
    • 5/5 Conventional ARM
    • Can convert to a 30 Year fixed rate at completion of construction, based on Construction Conversion Rate on daily rate sheet or,
    • Can stay on the 5/5 ARM and modify the rate to the day’s prevailing rate or the note rate, whichever is lower.
    • 5/5 Mini Jumbo & 5/5 Jumbo ARM
    • Can modify the rate to the day’s prevailing rate or the note rate, whichever is lower.
  • Fees apply to the conversion or modification as noted above.

   Draw Period

All draw schedules must be approved by the lender prior to closing. As phases of the construction are completed, the home will be inspected. Upon satisfactory inspections, the funds will be disbursed via check made payable to both the member and builder.


Draw 1- 20% of contract

Minus any earnest deposits and prepaid items; paid to or in behalf of Contractor/Builder

Foundation build, slab poured


Foundations survey



Draw 2- 20% of Balance


Exterior Walls build

Beam poured

Roof Dried in

Floor Joists in place

Title Update required



Draw 3- 20% of Balance


All mechanical rough – in complete and inspected

Windows & door frames installed Framing & duct work completed



Draw 4- 15% of Balance


Roof complete

Drywall installed and insulation completed.




Draw 5 – 15% of Balance


Exterior walls complete for painting Interior woodwork, tile & trim Completed

All cabinets, vanities, & plumbing completed All mechanical heating & ac installed.

Title Update required



Draw 6 – 10% of Balance


All painting, landscaping, driveways and walkways completed.

Certificate of Occupancy issued.

Title Update required



Pool Draws      

On properties involving the addition of a pool, the construction draws will be disbursed as follows:

Draw 1- 50% of Balance


Pool Shell complete and set, all Permits


Draw 2 – 25% of Balance


All electrical work completed

All plumbing installed & operational



Draw 3 – 25% of Balance


Decking completed Pool interior finished

Screening installed (if applicable)







Shane Hulslander, Credit Analyst

Aileron Mortgage

2534 SE Santa Barbara Pl, #201

Cape Coral, FL 33904

239-331-5600 office    239-645-4939 fax

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Apply Online: Click HERE

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