California Construction to Permanent Loans (Single Close Transactions)

California Construction to Permanent Loans (Single-closing transactions) may be used to combine the interim construction loan financing and the permanent financing should the borrower want to close on both the construction loan and the permanent financing at the same time.

California Construction to Permanent loans

Financing your custom home is typically a 2-step process. However, RTC will consider financing the land acquisition, construction expenses, and the permanent loan all in one loan, on a case-by-case basis.

Step 1 – Land Acquisition


Cost $250,000
25% down $62,500
Land loan amount $187,500

Land Loans are available with 1-year, 2-year, and 3-year terms.

You should choose a land loan term that will give you enough time to design your home and to select a building contractor.

Step 2 – Get Pre-Qualified for a Construction to Permanent Loan

As soon as you have a construction budget, an RTC loan officer will pre-qualify you for one of our California construction to permanent loans. The construction to permanent loan will pay off your land loan, finance construction expenses, and will automatically roll into the permanent loan of your choice once construction is completed.

If you financed your land purchase with RTC Mortgage, you will simply need to update your file when you are ready to proceed to a construction to permanent loan.

Deal Structure

Construction cost $250,000
Land cost $250,000
Total $500,000

$500,000 cost x 80% = $400,000 Loan amount
Down payment 20% = $100,000

Cash needed to close construction to permanent loan

Down payment $100,000
Equity in land $62,500 (see step 1)
Total cash to close $37,500 + closing costs

Construction Package Checklist

General Contractor

Retaining the services of a licensed general contractor is required for every construction loan. Exceptions for owner builder will be considered for a licensed contractor.

Construction Contract
The contract, executed by the contractor and the borrower is an agreement between the parties outlining the cost of the project, responsibilities assigned to the contractor and borrower, and the disbursement schedule.

Plans and Specifications
The plans and specifications used for appraisal purposes much exactly match those submitted to the County’s Building Department. This must be certified by the contractor.

Payment and Performance Bond
A payment and performance bond gives the lender and the borrower the assurance that the construction project will be completed and to satisfaction. It must be issued by a bonding company that is acceptable to the lender.

Building Permit
A copy of the building permit issued by the County must be provided.

Property Inspections
A property inspection will occur at the time of each disbursement to track the progress of the construction contract timeline. Prior to the release of funds, the goal of the timeline must be met.

Notice of Completion
Once a notice of completion is received from the bonding company, your loan will be converted to permanent financing.

Loan Terms

The permanent loan term is decided and locked in at loan submission. This is an added benefit in a rising interest environment. Your rate during construction is your permanent rate and is interest only.

Residential Construction to Permanent Loan

  • Build a custom home
  • Build a custom Ohana (attached or detached accessory dwelling)
  • Build a custom home and Ohana
  • Loan can be considered for a purchase
  • Loan can be considered for a refinance
  • Loan amounts up to $4,000,000

Permanent Loan

The construction loan will automatically roll into a permanent loan as soon as you receive your notice of completion. If you have a 6-month construction period, you will have a 354-month amortization on the permanent loan. Construction periods range from 6 to 18 months.

RTC Mortgage offers several California construction to permanent loans, available throughout the state of California, to choose from.