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Single-Close Construction Loan

From groundbreaking to move-in — one easy process.

Apply Now Get Preapproved

Or call 1-800-561-9433

Single-Close Construction Loan

One closing, one loan.

HOW THE LOAN WORKS

  • You provide information on your planned home, including materials to be used and total cost to complete the project
  • Funds are disbursed to the builder at various stages of construction
  • During construction, you pay monthly interest-only payments based on what funds have been given to the builder
  • After the one-year construction term, the loan switches to permanent financing with the same interest rate
  • Apply in 15-20 minutes!

MAY BE A GOOD CHOICE IF

  • You want one loan that covers new home construction and then converts to a standard mortgage

KEY FEATURES

  • One closing before construction starts — no need to close again when the home is finished
  • Down payment as low as 10% of the purchase price (lot equity may be credited toward your down payment).
  • No Private Mortgage Insurance (PMI) required
  • You pay only the interest during construction
  • 12-month construction term with 90% Loan to Value (LTV) up to $750,000, and 85% LTV up to $1,000,000
  • Only available in Indiana and with owner-occupied builds
  • Low fees and closing costs

Call for Rates 1-800-561-9433

 

Maximum Loan Amount of $1,000,000. All loans are subject to credit approval and appraisal. Rates and terms are subject to change. This is not an offer to extend credit as defined by Section 1026.2 of Regulation Z.

So, what exactly is a Single-Close Construction Loan?

Couple with baby doing some renovations on their doors

This loan is used when building a new home and acts as two loans in one: your construction loan plus your mortgage once the house is finished. It’s nice because during construction, your builder is paid as bills are submitted and you pay interest only on what funds have been used so far. After the one-year construction term, the loan is simply modified to full principal and interest payments based on your established interest rate at construction closing.

One big advantage of using this approach is that you pay closing costs just once. If you did a separate construction loan and then a mortgage, you would have closing costs both times. If you already have equity in your lot that can be credited toward the down payment.

You will have one-on-one personal guidance throughout the process, including being available to answer your builder/contractor’s questions along the way to keep the process moving smoothly.

Apply Now

How does a Single-Close Construction Loan compare to other loan/mortgage options?

The single-close construction loan lets you finance your construction and then turns into your mortgage. Another option is to get a land loan to cover the purchase of a residential lot which you would combine with a conventional mortgage.

  Single-Close Construction Loan Land Loan Fixed-Rate Mortgage Adjustable Rate Mortgage
Key Benefits

One closing, one loan1

Keeps your land and home loans separate

Predictable payments

No interest-rate surprises

Lowest short-term rates

Initial lower monthly payments

A Good Option If You

Want one loan that covers new home construction and then converts to standard mortgage

Are buying a lot for a future home

Want your rate and payments to stay same for life of loan

Plan to stay in your home for several years

Are comfortable with rate and payments fixed at first, then adjusting later

Don't plan to stay in the home long

Available Loan Terms

12-month construction term

1 year maximum

Purchase & Refinance:

5, 7, 10, 15, 20, and 30 years

Purchase & Refinance:

5/5 ARM 30 year and 7/6 ARM 30 year. Please call for information about other ARM products and terms.

Interest Rate As Low As Contact Us for Options Contact Us for Options

Purchase: 6.875% for 15-Year Fixed

Refinance: 7.250% for 15-Year Fixed

Purchase: 8.000% for 3/6 ARM 30-Year

Refinance: 8.500% for 3/6 ARM 30-Year

APR As Low As Contact Us for Options Contact Us for Options

Purchase: 6.941% for 15-Year Fixed2

Refinance: 7.317% for 15-Year Fixed2

Purchase: 8.314% for 3/6 ARM 30-Year3 

Refinance: 8.455% for 3/6 ARM 30-Year3 

No Points
No Mortgage Insurance (PMI)
Down Payment As low as 10% of purchase price 20% or more of lot value As low as 5% of purchase price As low as 10% of purchase price
Loan Limits

Up to $1 million

Special Feature

 

What makes up the Construction Loan costs?

There are a number of costs that go into building a new home:

Land/Lot

You may purchase the land or lot you have under contract at closing with proceeds from the Single-Close Construction Loan, or you may have already purchased the land and have a loan to be paid off with proceeds from the Single-Close Construction Loan. Or, you may own the land free and clear.

Soft Costs

Permit fees, engineering fees, architectural fees, and other costs associated with building the home but not directly part of the actual construction costs. You may have already paid some of these costs upfront. If so, these paid items may be considered equity. Your Mortgage Loan Originator will be able to determine this with proper documentation.

Hard Costs

These are tangible costs associated with the actual construction of the home. This includes materials and labor costs.

Total Costs

The total cost consists of all of the above.

Maximum Loan Amount

You may borrow up to the maximum loan amount as figured from the lesser of the appraised value or the actual cost (lot plus construction costs).

Lot Equity

The land value is taken from the appraisal, if owned, before closing. The difference between the appraised land value and the construction costs plus land payoff, if applicable, will be the lot equity. The lot equity will be a credit toward the required down payment.

What fees and closing costs should I expect?

The specific amount of your closing costs will vary. A home loan often involves many fees, such as the appraisal fee, title charges, closing fees, and state or local taxes. These fees vary from state to state and also from lender to lender. Your Elements Mortgage Loan Originator will review all costs with you based on your specific loan amount, purchase price, and home value.

Third Party Fees

Third party fees are ones that we collect and pass on to the person who actually performed the service. These can include the appraisal fee, the credit report fee, the settlement or closing fee, the survey fee, tax service fees, title insurance fees, flood certification fees, and courier/mailing fees. For example, an appraiser is paid the appraisal fee, a credit bureau is paid the credit report fee, and a title company or an attorney is paid the title insurance fees. 

Taxes and Other Unavoidable Costs

These fees include state/local taxes and recording fees and will most likely have to be paid regardless of the lender you choose. If some lenders don't quote you fees that include taxes and other unavoidable fees, don't assume you won't have to pay it. It is possible that a lender who doesn't tell you about the fee hasn't done the research necessary to provide accurate closing costs. 

Lender Fees

Lender fees such as points, document-preparation fees, and loan-processing fees are retained by the lender and are used to provide you with the lowest rates possible. This is the category of fees that you should compare very closely from lender to lender before making a decision. Elements charges a standard $995 origination fee on all mortgages.

For more information, call us at 1-800-561-9433.

How does the Construction Loan process work?

The Single-Close Construction Loan process is very similar to a standard purchase or refinance transaction. But unlike a purchase transaction for an existing home, the Single-Close Construction Loan involves determining the value of the new home upon completion, information on the planned home, and the total cost to complete the project.

Final Plans and Specifications

These consist of a legible set of architectural drawings (building plans). They must include a floor plan showing all dimensions and outside elevations (drawings of the exterior). In addition, the builder should provide a detailed description of the materials to be used in construction of the home; for example, wood shingle or lightweight tile roofing; brick or stucco exterior. This information will be provided to the appraiser who will determine the value, subject to completion per plans and specifications.

Construction Contract

This is the agreement between you and the builder that details the planned construction project, the agreed upon cost, and the construction term to complete the project. The final plans and specifications should be an attachment to the construction contract.

Detailed Line Item Cost & Draw Schedule

This schedule is prepared by the builder and should include hard costs (direct costs) and soft costs (indirect costs). The total should match the Construction Contract total. The Draw Schedule is used to advance funds to the builder as work is completed.

Builder Registration

We require our builders to be registered with Elements. Your Mortgage Loan Originator will work on this process directly with the builder.

How are Draw Funds disbursed?

Draw disbursements or progress payments are made on a work-completed basis and occur over a period of time as the work progresses. The builder will submit draw requests directly to our Construction Department, itemizing the work completed and the amount requested for payment. The percentage of work completed is determined by an independent third-party inspection service. Your builder will designate a construction bank account at a financial institution and disbursements will be wired directly to that account after receipt of the inspection report.

Initial Disbursement

The initial disbursement at closing includes the payoff of the lot (if applicable). Also, a start-up draw may be disbursed to the builder.

Final Draw

The final draw to the builder will be paid upon completion of construction and receipt of a final appraisal inspection, a “clear endorsement” from the title company, a final survey if required, homeowner’s insurance policy, and any other documentation as may be required for our particular loan.

What's the Construction Timeline?

  • SITE SELECTION
    If you have not already selected and purchased your lot, location is one of the most important factors to consider. Some realtors specialize in finished lots as well as developers who sell finished lots. A current survey of the property indicating all easements and rights of way will be required for closing.
  • MEET WITH THE BUILDER AND ARCHITECT
    You may start by meeting with a builder or architect. Many builders have architects on staff or certain architects they regularly work with. Keep in mind that each plays an integral role in the process and will work together to help make your vision a reality.
  • MEET WITH THE LENDER
    It’s never too early to meet with your construction lender. An Elements Mortgage Loan Originator can help in planning for your future investment.
  • LOAN CLOSING
    You must have an adequate down payment or equity at the time of closing. Equity is defined as cash paid toward the lot or construction costs, both hard and soft.
  • UP TO 12 MONTH CONSTRUCTION PHASE
    Enjoy a construction phase of up to 12 months with interest-only payments while you complete your new home. You will be charged interest only on the funds disbursed. The interest-only construction phase of your financing may continue past your home’s completion and your move-in, up to 12 months from loan closing. You will be responsible for continuing to make property tax payments to the county during this time.
  • SELL OR LEASE YOUR CURRENT HOME
    If you currently own a home, your Mortgage Loan Originator will help you determine your need to sell your home first. If you do not have to sell your home, close on the Single-Close Construction Loan and have up to 12 months to sell or lease your current home before loan modification. No need to move twice!
  • LOAN MODIFICATION
    Once construction is complete and a Certificate of Occupancy from the county has been issued, you may move in. The final draw disbursement will take place at this time. The Single-Close Construction Loan will be modified upon completion of the construction of your home and 12 months after loan closing. The modification will involve setting up an escrow account for property taxes and homeowner's insurance. Certain conditions and restrictions may apply.

Should I get preapproved?

Man using ruler to make plans for improvements

Call us at 1-800-561-9433 to see if you can be preapproved for a loan so that you know what price range you can afford, to evaluate the monthly costs of a mortgage, and to see how much of a loan you can afford. The preapproval will also give you some leverage when negotiating with the builders.

Get Preapproved

Does Elements have a special program for first-time homebuyers?

A couple unpacking into their new home

Yes! Our First-Time Homebuyer Program allows you to purchase a new home with as little as 5% down with no Private Mortgage Insurance (PMI). The loans can be up to $450,000, and it’s okay if your down payment was gifted to you. We will also be there to give you guidance at each step through the process.

We also have other programs that are available with even lower down payment terms such as FHA, VA, and USDA loans. For more information, call us at 1-800-561-9433.

What happens during the mortgage application process?

Couple talking to architect about home improvements

Getting Started

You can apply online in 15-20 minutes! Submit your application anytime. Or call us at 1-800-561-9433 to apply by phone. When you apply, have ready your government-issued ID (driver’s license, state ID, or passport) and estimates of your household income, assets, home value and price you paid for your home. 

Gathering Documentation

We’ll contact you within one business day after you submit your application to review documentation that we'll need from you. We’ll also answer any questions you may have. 

Application Review & Approval 

Once you have supplied your documents, your loan will be reviewed by an underwriter. After the underwriter review, your Elements Mortgage Loan Originator and Loan Processor will work together to obtain any further documentation that is needed to close your loan, including the title work and an appraisal based on your plans, specifications, and value of your lot/land.

Closing

Once your loan has received final approval, your closing will be scheduled at a location convenient for you. That's it — your mortgage is complete! Application to closing takes an average of 45 days

Get Started

Why should I go to Elements for my mortgage?

Like a Bank, Only Better!

Personal Mortgage Guidance

Buying a home can be a bit overwhelming. But don’t worry. We’ll be with you every step of the way to guide you through the mortgage process, from pre-approval all the way to closing. You’ll have your personal mortgage expert’s cell phone number, so you can get all your questions answered very quickly. 

Better Rates. Fewer Fees.

Because we’re a credit union, we return profits to members in the form of reduced fees, higher savings rates, and lower loan rates.

Trusted Advice. Fresh Approach.

We pride ourselves on being a trusted source for financial education. We come to your workplace to answer questions and can provide you with a dedicated Mortgage Loan Originator4 to guide you through the entire mortgage process.

Respected Locally. Accessed Globally.

Headquartered in Indianapolis since 1930, we rank among the top 3% of credit unions nationally5. We serve members in all 50 states and 50+ countries. You’ll have access to 5,000+ shared branches nationwide and 78,000+ surcharge-free ATMs globally.

High Tech. Human Touch.

Our technology makes banking with Elements easy. From quick digital applications to online and mobile banking, we’ll be by your side wherever you go. We’re here for you with member service available 24/7 and live chat during the workday.

Get Started

How do I apply?

Couple talking to builder about home being completed

3 Easy Steps to Apply

  1. Apply online - Do this whenever you have 15-20 minutes to spare. Or call 1-800-561-9433 to get started.
  2. Take our call - We'll contact you within one business day after you submit your application to go over what documentation we'll need and to answer your questions.
  3. Schedule your closing - We'll stay in touch with you throughout the mortgage process. Then, if you're approved, we'll schedule your closing at a location convenient for you.

Apply Now Get Preapproved

How is my mortgage payment calculated?

Your monthly mortgage payment is made up of four components: principal, interest, property taxes, and homeowner’s insurance (referred to as "PITI"). 

Principal and Interest

Principal and interest are based on the loan amount, interest rate, and term (amortization) of your loan. 

Property Taxes

Property taxes are assessed annually. The amount of your taxes is divided by 12 months in order to determine how much will be collected from you as part of your monthly payment.

Insurance

Homeowner’s Insurance is also paid annually. The amount of your annual premium is divided by 12 months as well. 

Private Mortgage Insurance (PMI) can also be a component of your monthly mortgage payment. This is insurance that the lender obtains to protect them against any loss if you stop making payments on your loan. PMI is typically required on Conventional loans if you do not put at least 20% down on a purchase or have 20% or more equity in your property on a refinance.

  1. 1 Single-Close Construction Loan Details: Maximum Loan Amount of $1,000,000. All loans subject to credit approval and appraisal. Rates and terms subject to change. This is not an offer to extend credit as defined by Section 1026.2 of Regulation Z.
  2. 2 Fixed Rates effective as of June 7, 2024.Note that the interest rates and annual percentage rates (APRs) shown here are available to borrowers with credit scores 780 or greater and 75% Loan-to-Value (LTV) and are based on loans secured by property in the state of Indiana. The actual interest rates and APRs available to you may vary based on your credit score, LTV ratio and other factors, and may be higher than those displayed here. Rates, closing costs and points may vary by property location, loan type and borrower credit and income characteristics. ALL FINANCING SUBJECT TO CREDIT APPROVAL. Example Monthly Payments based on a purchase price of $400,000, FICO® score of 780 or greater, 25% down payment, and loan amount of $300,000; they do not include amounts for taxes and insurance premiums, if applicable, and the actual payment obligation may be higher. Rates are subject to change without notice. Some restrictions may apply. Please call for rate information about mortgage products with terms other than those listed.
  3. 3 Adjustable Rates effective as of June 7, 2024. Note that the interest rates and annual percentage rates (APRs) shown here are available to borrowers with credit scores 780 or greater and 75% Loan-to-Value (LTV) and are based on loans secured by property in the state of Indiana. The actual interest rates and APRs available to you may vary based on your credit score, LTV ratio and other factors, and may be higher than those displayed here. Rates, closing costs and points may vary by property location, loan type and borrower credit and income characteristics. ALL FINANCING SUBJECT TO CREDIT APPROVAL. Example Monthly Payments based on a purchase price of $400,000, FICO® score of 780 or greater, 25% down payment, and loan amount of $300,000; they do not include amounts for taxes and insurance premiums, if applicable, and the actual payment obligation may be higher. Rates are subject to change without notice. Some restrictions may apply. Please call for rate information about ARM products with terms other than those listed.
  4. 4 Nationwide Mortgage Licensing System Registrants: Elements Financial FCU 410639, Shawn Adams 1969445, Charles Akinbola 1811812, Barbara L Allen 609733, Rick Anderson 169934, Nick Bates 2030112, Lindsey Badanek 724103, Cynthia Bell 427359, Nyla Bivens 1128100, Jamie Bonner 435395, Laura Bordenkecher 1590841, April Bratton 1169913, Miesha Brooks 1916521, Dawn Michelle Bruce 899516, Julie Bowering 443400, John Bugbee 581674, Melissa Bullock 2122657, Tracee Buckrop 609727, Karla Chevrie 404630, Eliza Claborn 1826115, Christine Clark 609734, Shane Clark 2253719, Brooklynn Coop 2416469, Kaylee Cooper-Sweeting 2552218, Mary Ann Deckard 1259646, Ashlie M Dew 539208, Curtis Neal Dodd 200259, Ron E Ellis Jr 1207645, Barbara Fey 489638, Kara Michelle Fischer 1469113, Tami Renee Forsythe 609730, Lenore Gallagher 975065, Sherry Gaw 988244, Emilee Goode 1776621, Jody Gray 2320767, Robert Goodwin 975067, Quentin Girten 1919653, Courtney Guth 1623852, Abigail Hall 1469114, Mariah Hestand 1809685, Dial Holliday 1436039, Jennifer Hooker 1807696, Theresa Iaria 1128103, Chris Jones 1484986, Kasey Jones 1942020, Christopher Kerr 143199, Andee Kettlebar 443776, Jill Kidwell 609731, Brooklynn King 2311546, Michele King 1759144, Sara Keedy 1512646, Sean Kiely 425511, Brittnie Kreuzman 2433042, Tara Nicole Lambert 883082, Teresa Ledford 444283, Cindy Leisure 1080329, Rebecca Littell 996455, Tyler Lonergan 2066084, Blake Luker 2007589, Kristy Mars 609725, Beverly Marshall 444941, Elizabeth McGovern 2313054, Alexander J Menestrina 1190426, Beth Moberg 473454, Justin D Montour 1198316, Brooke Moss 1824059, Terri Mossbrucker 1385461, Kristina Mowery 916118, Amber D Murphy 1082684, Mallory Neill 1750269, Constance Nelson 975071, Micha Noble 1950136, Grace Nolan 1840818, Regina Norman 1080327, Stacy Oswald 1380912, Clayton F Patterson 424532, Shaneka A Pedersen 426201, Meghan Pedigo 1601304, Shari Peek 1623439, Steve Perius 610700, Janene Petree 1529353, Kyle Thomas Plumlee 1930758, Noah Pumphrey 2313162, Kim Purkhiser 1313210, Tania Query 608383, Rebecca Rice 1007612, Miranda Grace Renee Rizzo 1198315, Janai S Roberts 252636, Tim Sallee 1192774, Susan Roberts 975068, Darlene Rogers 2266067, Carol Biale-Schroeder 1863399, Ryan Sebree 1866273, Ron Senci 1068152, Jessica Siegman-Bradford 1454706, Brad Smith 906855, Amy Lynn Stokes 1387213, Paulette Stull 1487007, Ann Sukup 2511201, Brent Tedford 1892880, Bradley Thompson 609732, Rhonda Weaver 2213627, Samantha White 1849420
  5. 5 Based on asset size as of 12/31/2022.