Yes — conventional construction-to-permanent and two-close products are common for borrowers who want a Fannie Mae or Freddie Mac permanent loan when the build is done. Higher credit expectations and down payments often around 20% apply, but lender overlays allow flexible builders and plans when guidelines are met.
Conventional construction loans fund ground-up builds through either a one-close construction-to-permanent structure or a two-close path with separate construction and permanent loans. Lot purchase, hard costs, and soft costs roll into the construction phase; funds release in draws as milestones pass inspection.
This path fits borrowers outside VA and FHA eligibility — or anyone who prefers conventional long-term pricing without government mortgage insurance. Credit, reserves, and down payment requirements are typically stricter than government programs, but builder and plan flexibility is often broader when lender overlays allow.
Ryan and Steve compare one-close vs. two-close structures against your timeline, rate-lock goals, and builder payment schedule before you commit to plans.
Both structures are conventional — the difference is how many times you close and when your permanent rate is set.
One closing covers construction and converts to permanent financing at completion. Rate may lock at closing or conversion depending on lender — fewer closing costs than two separate loans.
Separate construction loan and permanent mortgage mean two closings and two sets of fees. Some borrowers prefer this when they want to shop permanent rates after the home is built and appraised.
Conventional overlays often allow a wider range of builders and custom plans than government construction programs — subject to licensed builder approval and as-completed appraisal support.
Strong credit, higher down payment capacity, or ineligible VA/FHA occupancy scenarios may make conventional construction the cleaner fit for your permanent loan goals.
Conventional construction files need strong documentation and builder approval before draws begin.
Step 1
Choose one-close or two-close based on rate-lock goals and builder timeline.
Step 2
Architectural plans, specs, cost breakdown, and draw schedule enter the loan file.
Step 3
Construction funds release as milestones pass lender inspections.
Step 4
One-close converts automatically; two-close requires a second closing on the finished home.
Dig into down payment, closing structure, and fit before you choose a builder.
Down payment rules across VA, FHA, and conventional construction.
Single closing from construction through permanent financing explained.
Separate construction and permanent loans — pros, cons, and timing.
Compare programs and timelines to decide if building fits your goals.
2MG Daily
Recent articles on conventional construction, custom builds, and new-home financing.
May 12, 2026 • 2MG Daily
Read article →
Jul 21, 2026 • 2MG Daily
Read article →
Yes — conventional construction-to-permanent (one-close) and two-close construction products are widely available through Fannie Mae and Freddie Mac guidelines when a lender offers them. They suit borrowers outside VA and FHA eligibility or those who want a conventional permanent mortgage at completion.
Down payment often starts around 20% but varies by lender overlay, credit profile, and whether the lot is included. Some investors allow less with private mortgage insurance. Ryan and Steve quote your exact minimum before you sign a builder contract.
Conventional construction typically expects stronger credit and debt-to-income ratios than government programs. Lenders review reserves, builder approval, and the as-completed appraised value — not just your current lot condition.
No. All loans are subject to credit, income, property, and builder approval. Rates and program availability can change without notice and may not be available in all states. This page is educational — contact us for a personalized pre-approval review.
Compare one-close vs. two-close structures, down payment, and builder fit before you order plans. Ryan & Steve walk conventional construction borrowers through pre-approval — averaging a 20-day close on straightforward files.