Key takeaways A construction-to-permanent loan finances the construction of a house and converts to a mortgage on completion. Construction-to-permanent loans require only one round of closing costs. They also require a down payment. With a construction-to-permanent loan, you can draw funds at specific phases of construction, up to a certain loan amount. What is a construction-to-permanent loan? A construction-to-permanent loan — also known as a one-time close (OTC) or a single-close loan — is a loan that finances a new-construction home. Once the home is built, the loan converts into a traditional mortgage, usually with a 15- or 30-year term . A construction-to-permanent loan saves you time and money by streamlining the construction financing and the mortgage. You won’t have to pay two sets of closing costs or close on two separate loans. How does a construction-to-permanent loan work? Construction-to-permanent loans function in two phases: construction and post-construction.…