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Construction Loan – Single Close

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Homebuilding Starts Here

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Features & Benefits

A Single Close Construction to Permanent loan is a mortgage that can be used to finance both the construction phase and the permanent financing phase of a residential property in one, single closing transaction—making it a more affordable option when compared with the alternative two-close construction only and permanent financing loans.

ESL offers fixed-rate financing to protect borrowers from rising rates during the construction phase of the project. Our single close construction to permanent loan automatically converts to a fixed-rate mortgage when the construction is complete.

The construction to permanent loan is ideal for borrowers who have predetermined the amount of funds needed for construction at the time of application, and do not anticipate additions, upgrades, or delays during the construction phase. Cost overruns can be paid by the borrower directly to the builder if needed.

If borrowers do experience unexpected delays or require modifications to the original terms of the mortgage and/or maturity date, ESL has you covered with additional closing options at reduced costs.

How to Get Started

Speak with an ESL Business Development Mortgage Originator
Interested members should reach out to an ESL Business Development Mortgage Originator (585.336.1502) and get prequalified or submit an application to get started.

Property Eligibility

Eligible properties include owner-occupied newly built single family home or a second home.

Selecting a Builder

It’s important that a borrower partner with a reputable builder during the construction of any home to make sure the builder is knowledgeable and experienced in building the desired house in terms of price, style, and size.

ESL is collaborating with reputable builders across our lending area. Builders interested in working with ESL on new residential construction should contact a Business Development Mortgage Originator for information on becoming an ESL participating builder.

Lending Area

Property must be located in Genesee, Livingston, Monroe, Ontario, Orleans, Seneca, Steuben, Wayne, Wyoming, and Yates counties in the State of New York.

Loan Limits

Current Construction Mortgage limits up to $1,500,000. Maximum LTV is 80% (Property types and/or LTVs may reduce loan maximums).

Draw Schedule

The following construction draw schedule will support builders with partial disbursements if appropriate. Requires approval from the borrower and ESL.

  • First Draw – Foundation, 20% of the Loan Amount
  • Second Draw – Rough Framing/Weather Tight, 30% of the Loan Amount
  • Third Draw – Electrical and Plumbing, 30% of the Loan Amount
  • Fourth Draw – Finish Work and Complete Final Walkthrough, 20% of the Loan Amount

Interest Rate

Construction Phase: Fixed Rate.

Permanent Financing Phase: Fixed Rate.


Construction Phase: Interest only payments of the outstanding balance (based on draws) are due the first of each month during the construction period.

Permanent Financing Phase: Principal and Interest payments are due the first of each month during the repayment period.

Rate-Lock Options

The borrower has the option to float their interest rate for both the construction phase and the repayment phase up to 21 calendar days prior to the scheduled closing date. Anytime during this float time period, the borrower may lock the interest rate. Extended rate locks are available from four, up to 12-months to complete the construction of the home.

Mortgage Insurance

Mortgage insurance is not required since the LTV is 80%. No Private Mortgage Insurance (PMI) required.

Closing Costs

Closing costs for construction loans are typically higher and include draw inspection costs and title review costs for each draw during the construction phase of the project. ESL will coordinate draw payments directly to the builder once approved by ESL and the borrower.

Late Fees

A payment is considered late if ESL does not receive the full monthly payment 15 calendar days after the scheduled due date. The late fee charged is 2.0% of the total overdue payment of principal and/or interest.

Payment Options

Payments can be made through ESL Mobile/Online Banking, by Automatic transfer (AutoSweep) from ESL Savings or Checking Account, Automatic debit from a checking or savings account at any financial institution, at ESL branches, the ESL contact center, or Live Chat Banking.