What Is a Two-Time Close Construction Loan? Understanding Interim Financing for Your Custom Build
Thinking about building your dream home? If you’re considering new construction, it’s important to understand your financing options — especially the difference between One-Time Close and Two-Time Close Construction Loans.
At Supreme Lending, we’re proud to now offer Two-Time Close Construction Loans, also known as Interim Construction Loans, to help give our clients greater flexibility, control, and customization when building a home from the ground up.
What Is a Two-Time Close Construction Loan?
A Two-Time Close Construction Loan is a financing structure where you take out two separate loans:
- Interim Construction Loan: This short-term loan is used to finance the actual construction of your home. It typically features interest-only payments during the build process.
- Permanent Mortgage Loan: Once your home is complete, you apply separately for a traditional mortgage that replaces the construction loan. This becomes your long-term financing.
Unlike a One-Time Close — which wraps both loans into a single transaction — a Two-Time Close gives you more flexibility to shop for the best long-term mortgage once the build is complete.
Key Benefits of Two-Time Close Construction Loans
More Flexibility:
You can select your permanent financing terms after construction is finished — ideal if interest rates improve or your financial goals change.
Ideal for Custom or Complex Builds:
This option works well for unique home designs or projects that need extra time, customization, or coordination with builders.
Low Down Payment Options:
- 5% down for primary residences
- 20% down for second homes
- 25% down for investment properties
- Jumbo loan options available up to $1.5 million
Lot Equity Can Be Used:
If you already own the lot or have equity in the land, that value may be applied toward your down payment and overall financing strategy.
Interest-Only During Construction:
Manageable monthly payments while your home is being built.
Who Should Consider a Two-Time Close?
Two-Time Close Construction Loans are a great fit for:
- Borrowers building custom homes on their own land
- Buyers working with independent builders
- Homeowners who want more time and flexibility to secure long-term financing
- Clients purchasing second homes or investment properties
If you’re working with a builder or planning a detailed project with lots of moving parts, a Two-Time Close loan can help you stay in control while still getting the financing you need.