An Overview of Our Program
Step One: Become A Customer
Our program exists solely to finance custom pro-builders doing business with our affiliate, Guy C. Lee Building Materials.
Before we can begin the process of considering a construction loan, you must first have an open account at Guy C. Lee Building Materials. You can find out more about our affiliate at their website.
Step Two: Lot Inspection
Our process is much less formal than most lenders. The first thing we want to see is the location.
Our goal is to decide if we are comfortable with the risk of building the house that you propose at that particular location. We look at each and every lot personally, before determining if we are interested.
We just need to know a few basics upfront: location, land cost, size of house, and the price you plan to sell the finished product.
Contact your local Guy C. Lee Store Manager or our loan officer to request a lot review for your new project.
Step Three: Get The Details
After inspecting the property, our loan officer will call you to discuss the project. Most of the time, a tentative decision will be given at that time.
At this point, we will need more information, such as the house plans, a copy of the purchase contract, your preferred closing attorney, and other specifics. After an initial review, the loan officer will forward the details to a licensed appraiser that will provide a valuation on the finished product. This usually takes from two to three weeks.
The details are collected on a form called a “New Project Start”. Our loan officer will provide you with this form after doing an in-person review of the property.
Step Four: Contact Your Attorney
You and your attorney will then schedule a closing date. The attorney is responsible for securing title insurance, preparing the deeds, calculating taxes, and preparing a settlement statement (HUD-1).
This statement will show you the breakdown of closing costs and what funds that you will need to bring to the loan closing. While we only charge an origination fee, there are typically attorney fees, taxes, insurance, lot purchase costs, and other expenses detailed on the settlement statement.
We highly suggest you fully review the loan documents and settlement statement prior to the actual closing.
Step Five: Secure Builder Risk Insurance
Prior to closing, we require that you obtain Hazard Insurance, also called "Builder Risk Insurance".
Your insurance agent can typically email or fax the form verifying this coverage directly to your closing attorney. This insurance protects our investment in your project against losses from fire, wind, hail, and other hazards. On properties located in flood zones, flood insurance is also required but may be obtained after the foundation is in place.
We do not allow loans to close without proof of Builder Risk Insurance
Step Six: Loan Closing & Verification
Once you attend the loan closing and execute the documents, your attorney must record certain documents and send us the completed loan package. At this point we review the executed documents and verify that everything is in order. Once everything is ready to go, your loan is active and you are ready to break ground.
Beginning any construction, even land clearing, before the loan closing is a violation of our construction loan agreement.
More importantly, it is just not smart. We have seen cases where the entire land purchase was terminated and the builder lost all the upfront costs they had invested.
Step Seven: The Draw Process
Once your loan is active, you simply need to request draw inspections as you build the house. You do not need to tell us the items that you need a draw for, we send out inspectors as needed and they check off any work completed.
Draw Inspections may requested by leaving a voicemail on our draw request line (919-355-6638), or by emailing a request to email@example.com. Be sure to let us know your company name and the property description in your voicemail or message. The process continues until the house is complete.
We do ask that you refrain from calling for a draw inspection if there is no additional work complete.
Step Eight: Sell Project & Payoff The Loan
This is everyone's favorite part. You sell the house and payoff the loan, hopefully with a generous profit.
When your attorney needs a payoff on our construction loan, they can be obtained by emailing a request to firstname.lastname@example.org.