Whether there is a lack of affordable homes in the area, or you have a family that would love to build a new home but don’t think they can afford it (or both!), One-Time Close Construction-to-Permanent loans may be just what they need!
OTC – Do you know me?
As the name suggests, One-Time Close – or OTC – is single-close construction financing which allows qualified borrowers to finance the construction of a home, lot purchase / land payoff, and any needed site improvements, with just one closing. By comparison, traditional construction loans usually require a second closing when the home is ready to be occupied.
Benefits for brokers
The potential benefits for borrowers are obvious. But why should you care?
Learning about OTC can: provide increased opportunity to grow your business; help you establish credibility as a knowledgeable, trusted partner; help you build relationships with builders; and, most importantly, provide an alternative solution to help even more families. OTC loan programs may be just what the doctor ordered to help first-time homebuyers, downsizing Baby Boomers, or any eligible borrower who dreams of home ownership.
Options and advantages are many
Not only is OTC available for manufactured, modular, and stick-built homes, but there is a range of programs for many borrowers. With so many options available – FHA, VA, USDA, and Conventional programs – that means there is also a range of eligibility options to suit almost any qualified borrower.
Also, program options for builders allow them to load their pipeline with additional builds because they don’t have to float the entire OTC project. With a single closing, builders can also rest-assured that the buyer will qualify to move into the home once construction is complete.
You don’t have to go it alone
When it comes to offering OTC programs, the number one piece of advice collected from our lending partners, builders, and retailers alike is: Don’t go it alone. You are encouraged to find a knowledgeable partner, who can act as your mentor, for the first few times you complete an OTC loan. And, even though there is a learning curve, demonstrating your knowledge on a specialized program builds trust with your clients and can lead to additional business or even referrals.
Partnering with an OTC expert, One-Time Close Construction-to-Permanent financing can benefit everybody, including brokers, builders and retailers and, of course, homebuyers.
Learn more about OTC today, so together, we can bring more families home.
Photography by [giggsy25] © Shutterstock.com
