Best Construction-to-Permanent Loan Lenders 2026: Scripts, Steps & Savings
Building your dream home? A construction-to-permanent loan combines construction financing and your mortgage into one loan, one closing, one set of fees. Compare the top lenders of 2026 and lock your rate before ground breaks.
Quick Summary: Construction-to-Perm Loans 2026
- ✓ One-time close: Single closing covers both construction (6-12 months, interest-only) and permanent mortgage. Saves $5,000-$10,000 vs two separate closings.
- ✓ Down payment: 20-25% typical. 10-15% with 720+ credit. VA construction loans offer 0% down for veterans. Check VA construction loan eligibility →
- ✓ Rate lock before construction: Lock your permanent mortgage rate before building begins. No risk of rising rates during the 6-12 month construction period.
- ✓ Credit score: 680+ for most lenders. 580+ for FHA construction-to-perm. 720+ for best rates and lowest down payment.
The One-Time Close Construction Loan Process: Step by Step
A definitive, numbered guide to the construction-to-permanent loan process in 2026. Each step is critical for a successful build.
- 1. Pre-Approval & Budget Planning: Get pre-approved based on credit, income, and the total project budget (land + construction + permits). The lender reviews your builder, plans, and appraised value. Get pre-approved for a construction loan →
- 2. Rate Lock: Lock your permanent mortgage rate before construction begins. This protects you from rate increases during the 6-12 month build. Some lenders offer float-down options if rates improve.
- 3. Single Closing: You close once — signing documents for both the construction loan and permanent mortgage simultaneously. You pay one set of closing costs (saving $5,000-$10,000 vs two closings).
- 4. Construction Phase (6-12 months): Funds are disbursed to the builder in draws (typically 5-6 draws) as construction milestones are completed. You pay interest-only on the drawn amount during this phase.
- 5. Inspections & Draws: After each construction milestone (foundation, framing, drywall, etc.), an inspector verifies the work. The lender then releases the next draw to the builder.
- 6. Conversion to Permanent Mortgage: Once construction is complete and the certificate of occupancy is issued, the loan automatically converts to a permanent mortgage. No second closing, no new credit check, no re-qualification.
- 7. Monthly Mortgage Payments Begin: You begin making standard principal + interest payments on your permanent mortgage rate (locked in Step 2).
What Is a Construction-to-Permanent Loan in 2026
A construction-to-permanent loan is a single mortgage that finances both the construction of a home and the permanent mortgage that follows. Also known as a one-time close or single-close construction loan, it eliminates the need for two separate loans and two separate closings, saving borrowers thousands in closing costs and eliminating re-qualification risk.
Key features of construction-to-permanent loans in 2026:
- • Single closing: One set of closing costs (saves $5,000-$10,000)
- • Interest-only during construction: Lower payments while building (6-12 months)
- • Rate lock before construction: Protect against rising rates during the build
- • Automatic conversion: No re-qualification or second credit check when construction ends
- • Draw schedule: Builder receives funds in stages as milestones are completed and inspected
Top 5 Construction-to-Permanent Loan Lenders (July 2026)
| # | Lender | Min Credit | Min Down | Max Loan | Best For |
|---|---|---|---|---|---|
| 1 | Wells Fargo | 680 | 10% | $2M | Best one-time close |
| 2 | TD Bank | 700 | 20% | $3M | Northeast markets |
| 3 | Navy Federal CU | 640 | 0% | $1.5M | Veterans (0% down) |
| 4 | US Bank | 680 | 20% | $2M | VA construction |
| 5 | FFB Bank | 700 | 25% | $5M | Luxury / custom builds |
FHA & VA Construction-to-Permanent Loans in 2026
FHA Construction-to-Perm
- • Min credit: 580 (3.5% down) / 500 (10% down)
- • Down payment: 3.5% with 580+ credit
- • Max loan: FHA county limits ($472K-$1.08M)
- • MIP required: 1.75% upfront + 0.55% annual
- • Best for: Moderate-income custom builds
VA Construction-to-Perm
- • Min credit: 620+ (lender dependent)
- • Down payment: 0% for eligible veterans
- • Max loan: No official limit (county-based)
- • No PMI: Funding fee 2.3% (financeable)
- • Best for: Veterans building custom homes
Construction-to-Permanent Loan Rates & Costs in 2026
Construction-to-permanent loan rates are typically 0.25-0.75% higher than standard mortgage rates because of the construction risk. In July 2026, expect:
| Loan Type | Rate Range | Down Payment |
|---|---|---|
| Conventional C2P | 6.75-7.50% | 20-25% |
| FHA C2P | 6.50-7.25% | 3.5% |
| VA C2P | 6.25-7.00% | 0% |
| Jumbo C2P | 7.00-7.75% | 25% |
Closing costs: 2-5% of loan amount. During construction: interest-only payments on drawn balance. After conversion: standard P&I payments. Get personalized rate quotes →
One-Time Close vs Two-Time Close: Which Is Better?
| Feature | One-Time Close (C2P) | Two-Time Close |
|---|---|---|
| Closings | 1 | 2 |
| Closing Costs | 1 set ($5-10K saved) | 2 sets |
| Rate Lock | Before construction | After construction |
| Re-Qualification | Not required | Required |
| Rate Risk | Protected | Exposed |
| Flexibility | Lower | Higher |
Verdict: One-time close is better for most borrowers. It saves money, locks your rate, and eliminates re-qualification risk. Two-time close only makes sense if you expect rates to drop significantly during construction. Compare one-time close lenders →
📋 Free Construction Loan Checklist & Script Pack
Get our proven negotiation scripts, builder interview questions, and closing cost checklist. Save $10K-$30K on your construction loan.
💡 The 3-Lender Rule: Get 3+ Competing Construction Loan Quotes
Construction loan rates vary by 0.25-0.75% between lenders. On a $500K build, that's $80-$240/month difference = $29K-$86K over 30 years. Always get quotes from at least 3 lenders. Here are our top 3 picks for different situations:
Wells Fargo
Best one-time close — 10% down with 720+ credit, 680 minimum, $2M max. Strong nationwide network.
Get Wells Fargo Quote →Navy Federal CU
Best for veterans — 0% down VA construction, 640 credit, $1.5M max. No PMI, no funding fee for disabled vets.
Check Navy Federal →TD Bank
Best for Northeast — flexible terms, 700 credit, $3M max. Strong regional builder network.
Get TD Bank Quote →⚔️ What's Negotiable (And What's Not) on Your Construction Loan
Knowing what you can negotiate saves thousands. Here's the complete breakdown — use our scripts below to negotiate each item.
| Fee / Term | Negotiable? | Typical Cost | Potential Savings | Negotiation Script # |
|---|---|---|---|---|
| Origination Fee | ✅ Yes | 0.5-1.5% of loan | $2,500-$7,500 | #1 |
| Interest Rate | ✅ Yes | 6.25-7.50% | $80-$240/mo | #2 |
| Rate Lock Fee | ✅ Yes | 0.25-0.50% of loan | $1,250-$2,500 | #3 |
| Construction Draw Fee | ✅ Yes | $100-$500 per draw | $500-$3,000 | #4 |
| Inspection Fees | ⚠️ Sometimes | $200-$500 per inspection | $200-$1,500 | #5 |
| Title Insurance | ✅ Yes | $2,000-$5,000 | $500-$1,500 | #6 |
| Appraisal Fee | ❌ No | $1,500-$3,000 | $0 | — |
| Recording Fees | ❌ No | $100-$500 | $0 | — |
| Builder Contingency | ✅ Yes | 5-10% of build cost | $10K-$25K | #7 |
Total potential savings: $15,000-$40,000+ if you negotiate everything on this list. Get 3 competing quotes to leverage →
📝 7 Proven Construction Loan Negotiation Scripts
Use these exact scripts when talking to construction loan officers. Each script includes context, goal, estimated savings, and the exact words to say.
Waive the Origination Fee
Say This:
""I'm comparing construction-to-perm loans from three lenders right now. Two of them have offered to reduce or waive the origination fee. Can you match that? I'm ready to move forward this week if we can get the origination to 0.5% or less. My builder is ready to break ground in 30 days.""
Lower the Interest Rate
Say This:
""I have a quote from [Competitor Lender] at 6.75% for the same construction-to-perm product. I'd prefer to work with you because [reason: closer relationship, better digital portal, recommended by builder]. Can you match or beat 6.75%? If you can get to 6.5%, I'll sign today and lock the rate.""
Negotiate the Rate Lock Fee
Say This:
""I noticed the rate lock fee is 0.50%. [Competitor] is offering a free 60-day rate lock on their construction-to-perm product. Can you waive or reduce the rate lock fee? I'm concerned about rates rising during my 9-month build, so the lock is important to me — but I don't want to pay $2,500 for it.""
Reduce Draw Fees
Say This:
""I see the draw fee is $300 per draw, and we'll have about 6 draws. That's $1,800 total. Can you cap draw fees at $100 per draw, or waive them entirely? [Competitor] includes unlimited draws at no charge. This is a significant cost during construction when I'm already paying interest on the drawn balance.""
Negotiate Inspection Fees
Say This:
""The inspection fees total $2,000 for 5 inspections. Can you bundle these into the closing costs so they're financed into the loan rather than out-of-pocket? Or can you reduce to 3 inspections if my builder provides progress photos and certified completion reports? My builder is licensed and has done 50+ projects with your bank.""
Shop Title Insurance
Say This:
""I'd like to shop around for title insurance. I've gotten a quote from [Title Company] for $2,800 for the same coverage. Can you match that, or can I use my own title company? I understand you have a preferred provider, but the $1,200 difference is significant for my budget.""
Reduce Builder Contingency Reserve
Say This:
""My builder has provided a fixed-price contract with a guaranteed maximum price. There are no allowances or cost-plus provisions. Given the fixed-price contract, can we reduce the contingency reserve from 10% to 5%? That frees up $25,000 I can use for the down payment or closing costs. I can provide the builder's contract and references showing they've completed 40+ projects on budget.""
Ready to negotiate? Get 3 competing quotes first.
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Get 3 Construction Loan Quotes →Ready to Build Your Dream Home?
Compare construction-to-permanent loan rates from top lenders. One closing. One rate. One dream.
Compare Construction Loan Rates Now →Frequently Asked Questions: Construction-to-Permanent Loans 2026
What is a construction-to-permanent loan in 2026?▼
A single loan covering both construction and permanent mortgage. One closing, interest-only during build (6-12 months), then auto-converts to a standard mortgage. Compare construction-to-perm lenders →
How much down payment do I need for a construction-to-permanent loan?▼
Typically 20-25% down. 10-15% with 720+ credit. VA construction loans offer 0% down. FHA construction-to-perm requires 3.5% down with 580+ credit. Compare down payment options →
What credit score is needed for a construction-to-permanent loan?▼
680+ for conventional. 580+ for FHA. 620+ for VA. 720+ for best rates and lowest down payment. Check which lenders accept your credit score →
One-time close vs two-time close — which is better?▼
One-time close saves $5-10K in closing costs, locks your rate, and eliminates re-qualification. Two-time close only wins if you expect rates to drop during construction. Compare one-time close lenders →
Which lenders offer the best construction-to-permanent loans in 2026?▼
Wells Fargo (10% down, 680+), TD Bank (Northeast), Navy Federal (0% down VA), US Bank, and FFB Bank (luxury builds). Compare all construction lenders side-by-side →
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