Hawaii Loan Options
Hawaii Construction-to-Permanent Loans (Single Close Transactions)
Construction to Permanent Loans (Single-closing transactions) in Hawaii streamline the financing process, offering borrowers the flexibility to merge interim construction loan financing with permanent financing. This option provides the convenience of closing on both the construction loan and the permanent financing simultaneously, simplifying the overall transaction and enhancing the efficiency of the homebuilding journey.
Construction-to-Permanent Loans
Step 1: Land Acquisition
For example:
Cost $500,000
– 25% down $ 125,000
Land Loan Amount $375,000
Land cost $500,000
Total $1,000,000
Down payment 20% = $200,000
– Equity in land $ 125,000 See step-1 above
Total cash to close $ 75,000 + 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.
Pacific Home Loans offers several Hawaii construction to permanent loans—available on Oahu, Maui, The Big Island, and Kauai—to choose from.
Information and self-help tools are provided for your independent use and are not intended to provide investment advice. We cannot and do not guarantee loan eligibility or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to speak with one of our experienced loan officers for a loan eligibility analysis and custom rate and payment estimate.
