Florida VA, FHA & VA Jumbo Mortgage Financing Loans, Construction Builder Approval Process & Construction Fees.
The One-Time Closing VA Construction Loans require 2 approvals, one is the buyer's mortgage loan and the second is the builder's approval. The company that oversees the entire construction approval and funding process is NCF and here are the fees that they charge.
- Construction Admin Fee is 2.25% of loan amount.
- Construction Underwriting Fee is $250.
- Construction Closing Coordination Fee is $275.
- Construction Inspection Fee is $750.
- Interim/Construction Interest.
- On average these fees add about $5,000 per $100,000 borrowed to the sales price of the contract.
The buyer makes no payments during the construction process and the Builder is required to include the cost listed above into their cost of building the home. These fees can't be charged to the borrower and will be charged to Builder and included in the FINAL sales price of the home or be absorbed by the Builder.
These fees are not much more than a conventional construction loan because most lenders charge 1% to 2% of the loan in origination points and they have very similar constitution fees.
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Here are the steps for our FHA & VA Construction Building & Builder Approval Process.
STEP 1: Builder Makes Application to get approved by NCF.
- Disbursement Instructions
- Copy of Contractor’s License
- Evidence of General Liability Insurance
- Evidence of Worker’s Compensation Insurance
- Evidence of Builder’s Risk Insurance
- Most recent two years tax returns
- Year-to-Date Profit & loss statement and current balance sheet
- Executive Summary providing an overview of experience
- Click here to open the Builder application and necessary forms
Please email all of the items above and the completed builder application to info@FirstFLFinancial.com
When we have all the required builder documents we submit your Builder application to NCF for the builder approval.
STEP 2: Construction Sales Contract, Builder or you provide us with the “Preliminary" Contract/Purchase Agreement.Which we will submit to NCF so they can calculate the construction loan fees that will be included in the sales price.
STEP 3: Construction Cost/Sales Price Calculation
NCF will then give us the NEW sales price which will include all of the construction fee's that need to be included in the builder's FINAL Contract/Purchase Agreement and then the builder will provide us with the signed FINAL Contract/Purchase Agreement with the construction loan fees included.
STEP 4: Builder to Provide us with, Detailed cost breakdown
STEP 5: Underwriting
We will submit the file for underwriting of the construction funding and the borrowers FHA loan.
STEP 6: Closing
At the closing the land seller or the mortgage will be paid off with the initial draw, there is no initial draw to the Builder at the closing before any work is in place and after a three business day cooling period the Builder can be reimbursed for any site permit related expense with notification and documentation.
STEP 7: Post-Closing / Construction Begins
A Letter of Commencement will be sent to the Builder by NCF informing you the loan has closed and construction can begin. This letter details the instructions on how and when to request the draws. NCF will also at this time provide to the Builder a list of specific items and forms that will be required to be submitted prior to the release of the final draw
STEP 8: Construction Draw Procedures
Builders can receive up to five draws, upon request by the Builder for a construction draw, NCF will immediately order an inspection of the construction project. Upon receipt of the report, NCF will match the report with the Home Construction Cost Breakdown to determine the draw amount. All draws are based on a line item percentage completion and NCF will have the funds wired to the settlement agent and simultaneously provide Disbursement Instructions to the Settlement Agent for further disbursement to the Builder.
Interim Draws
It’s up to the Builder’s discretion when or if they take the interim draws. Line-Item Percentage of Completion Method used to determine draw amounts for site improvements and Interim draws are to be used to pay for site improvements/construction in place. Collateral inspection required when a draw for site improvements/construction in place is requested. NCF will order/pay for the collateral inspection. NCF will fund up to 90% of the Builder’s Contract Price prior to the Final Draw, provided the work is in place.
Final Draw
The final draw will fund all remaining completed improvements and will be funded once received and the Lender has approved all remaining funding conditions. Builder to advise NCF Construction Servicing Dept. when the project is complete so NCF can order the final inspection from the HUD fee inspector. NCF will pay for the final inspection when required and any cost for failed inspections will be deducted from the Builder’s Final Draw.
STEP 9: Construction to Permanent Loan Rollover
When all funding requirements have been met and received by NCF and the Lender, NCF will then forward final Disbursement Instructions to the Settlement Agent for disbursal of the final draw to the Builder and all remaining obligations. Once all funds have been fully disbursed, the file is complete. The borrower(s) will begin making their payments on the date established.
VA Builder Approval & Sign Up Information
Builders are not approved by VA. They need only to register with VA to obtain a VA Builder ID number. Thus, there is no lengthy processing time and in most cases, an ID number can be issued within a day or two.
To obtain a Builder ID number, three items need to be submitted to the Construction and Valuation unit of the local VA Regional Loan Center having jurisdiction over the area in which the builder will construct property. These items are:
Information concerning VA Builder ID number requirements can also be found in the VA Lender's Handbook (VA Pamphlet 26-7), section 10.07, page 10-14.
We offer loans for the entire state of Florida and all of the following cities;
Monroe County Florida Cities; Big Pine Key, Islamorada, Key Colony Beach, Key Largo, Key West, Long Key, Marathon, Marathon Shores, Sugarloaf Shores, Summerland Key, and Tavernier
Collier County Florida Cities; Marco Island, Naples Golden Gate, Lee County Florida Cities: Alva, Boca Grande, Bonita Springs, Buckingham, Captiva, Cape Coral, Fort Myers, Fort Myers Beach, Lehigh Acres, Sanibel. Jacksonville, Tampa, Saint Petersburg, Hialeah, Orlando, Fort Lauderdale, Tallahassee, Hollywood, Pembroke Pines, Miami, Palm Beach, West Palm Beach, Boca Raton, Miramar, Sarasota, Gainesville, Bradenton