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Construction Loans

The DFCU Construction Loan - Terms and Conditions

Available Product Type	SOFR 7/6 ARM/Conventional One-Time Close
Amortization Term	30 Years at modification
Loan Amount	$1,500,000 Maximum
LTV	90% to $1,100,000 80% $1,100,101 - $1,500,000 70% > $1,500,000
Prepayment Penalty	None
Loan Assumption	None
Eligible Properties	1-unit dwellings, detached condominiums, PUDs
Underwriting	Occupancy – Primary residences or secondary / vacation homes Minimum Credit Score - 680 or DU Approve/Eligible DTI – Max 45% (UW/Mgmt exceptions up to 50% with minimum 3 documented compensating factors) All Loans will be underwritten to FNMA guidelines and submitted to DU FNMA’s automated underwriting system.
Summary	5 draws. Max 1^st draw max 10% at closing.
Fee	0.5% Construction Admin Fee
Insurance Requirements	Builder’s Risk (aka Course of Construction) Insurance Policy with coverage in at least the amount of the loan and paid receipt for the first year’s premium required no later than loan closing. Homeowner’s Policy (hazard insurance) required at time of construction completion and modification of loan.
Taxes and Insurance	Borrower is responsible for payment of taxes and insurance during the construction period. If LTV is greater than 80%, an escrow account must be established for property taxes and all insurances, when construction is complete and the loan is modified to permanent terms.
Program Details	DFCU Financial offers a one-time close construction loan. During the closing of your construction loan you will sign an addendum to the note and mortgage that will modify the construction loan to your permanent financing. This will save you time and money; no additional closing costs or time off work for an additional signing. You will be able to lock in your interest rate at the time of application; the rate must be locked in at 14 days prior to closing. After your construction loan has been approved, you should not apply for any new or additional credit. You must agree not to do anything that could change your debt to income ratio or lower your credit score. DFCU Financial will run a credit report prior to modification of your construction loan. During construction you will only pay interest on funds that have been disbursed. If you would like an escrow account for the payment of taxes and insurance, that will be set up once construction is complete. DFCU Financial requires a licensed builder or general contractor that is unrelated to the borrower; no self-build projects are allowed. The borrower is not allowed to do any of the construction on the home. Your builder or general contractor will be required to go through a review and registration process with DFCU Financial. A copy of the signed contract with complete design plans and specs are required before an appraisal will be ordered. All changes made to the contract or design after the mortgage is closed must be approved by DFCU Financial in writing. Borrowers should keep in mind that DFCU Financial has approved them up to a certain loan amount and if change orders are needed, additional funds are the responsibility of the borrowers. The loan amount cannot change after the mortgage is closed.