The Construction Loan Process
The Loan Application
Once the construction loan budget process has been completed you will be sent a loan application kit. The kit will contain your loan application form, loan program disclosures, and the documentation that will be required from your builder. The documentation will include:
Construction Contract
The construction contract is an agreement between you and your builder that describes in detail the planned construction project including the amount of time it will take to build your home and the cost to complete the home. The construction loan term should be at least as long as the construction time listed in the construction contract. The contract must include a set dollar amount for the completion of your project.
General Contractor's License
Provide a copy of the Arizona general contractor's license.
Insurance Requirements
The following insurance requirements are in place to make certain that you have sufficient coverage during the construction process. Some key insurance policy features are detailed below:
Insurance Requirements for You
- Course of Construction Casualty Insurance - This is also known as "builder's risk" insurance; once the construction process is complete this will become your homeowner's insurance policy. The purpose of this policy is to provide coverage to the structure while it is under construction particularly if it is damaged during the construction process. The company holding your existing homeowner's insurance policy can provide this.
Budget
This line item form will break down all of the costs (both soft and hard costs) that are associated with building your new house and will be prepared by your builder.
< Budget | Additional Documents >
