Construction-to-Permanent (C2P) Loan Timeline
Construction-to-permanent loans cover the build phase and then convert to a permanent mortgage at completion. Total timeline: 6–18 months depending on construction time, plus 30–45 days for the permanent conversion.
Day-by-Day Timeline
- 1Stage 1 — Application and approval (30–45 days)
- 2Stage 2 — Construction phase (6–18 months)
- 3Monthly interest-only payments on drawn amount
- 4Draw schedule: foundation, framing, rough-in, drywall, finish, CO
- 5Stage 3 — Modification to permanent mortgage (30–45 days after CO)
- 6Final inspection and appraisal update
How CTC Manages This Process
CTC Processing manages both the construction phase and the permanent conversion. We track draw requests, coordinate inspections, and manage the conversion package so the borrower transitions smoothly to permanent financing.
Frequently Asked Questions
How do draws work in a C2P loan?
The loan funds construction in stages called draws. After each construction milestone (foundation, framing, etc.), the borrower and builder request a draw inspection. If the inspector confirms completion, funds are released. Interest is paid only on drawn amounts.
What happens at the end of construction?
The builder applies for a Certificate of Occupancy (CO). Once the CO is issued, the appraiser completes a final inspection (1004D). CTC then submits the modification package to convert the loan to permanent. This process takes 30–45 days.
What if the builder goes over budget?
Cost overruns beyond the contingency reserve require additional documentation and lender approval. Some lenders allow re-draws; others require the borrower to pay overruns in cash. CTC tracks the construction budget throughout the build phase.