Construction to Permanent Home Financing

How Do Construction Loan to Permanent Mortgages Work?

Construction to permanent mortgage loans are a unique variation that gives borrowers the funding to build their new home while helping them afford it over time. Generally, lenders will only grant mortgages for existing structures. Similarly, most construction loans only provide short-term financial assistance to purchase a plot of land and build on it.

Under a construction to permanent mortgage agreement, these two loans are available as a single package. The lender will provide a loan to finance a home's construction. When construction is complete, the construction loan converts into a permanent mortgage loan. Both loans have their own unique costs. Similar to a line of credit, borrowers only borrow the amount they need and accrue interest based on that value.

With Orrstown Bank, borrowers can benefit from a convenient construction to mortgage loan process. We offer two construction terms — 9 or 12 months. At the end of your selected duration, an inspection for compliance with local ordinances will confirm the home's completion. At this time, the construction loan will transfer into a separate mortgage loan with the new building as collateral.

Orrstown Bank offers construction to permanent mortgage loans to borrowers with a credit score of 680 or higher. Borrowers must intend to occupy the home and hire an outside contractor for construction. Mortgages are available with varying terms.

Benefits of Choosing a Construction Loan to a Permanent Mortgage Conversion

At Orrstown Bank, we offer construction to permanent mortgage loans that benefit borrowers in PA and MD. Choose a construction loan that converts to a permanent mortgage option for:

• One closing: Although two separate loans are taken out, you'll settle both deals at once. Single closing allows borrowers to save time and money over choosing separate lenders.
• Low down payment: Orrstown Bank offers down payments as low as 5% for qualifying borrowers.
• Permanent financing: We offer numerous fixed and adjustable mortgage rates with varying term options.
• Jumbo products: Contact us for availability and rates.

Why Borrow From Orrstown Bank?

As a locally owned and operated bank based out of Shippensburg, PA, Orrstown is a leading lender for mortgages and construction loans in MD, PA and beyond. In our 100-plus years of operation in the area, we've proudly supported our community with transparent services from a team of friendly faces.

Construction to permanent mortgage loans are an excellent choice to finance your home and its construction. For more information on our rates, terms or other loan services, complete the form on this page or contact an Orrstown Bank mortgage officer today!

Important Notice: Interest rates and maximum loan-to-value may be based on credit score, property type, occupancy, purpose, investor, insurer, loan-to-value and other factors. Additional investor, insurer and Orrstown Bank criteria/conditions apply to all products. Information provided is for illustrative general use only and does not contain all qualification and automated underwriting approval requirements. Orrstown Bank reserves the right to change this information at any time. Meeting any of the criteria does not constitute a commitment to lend.