What is a construction loan called that includes permanent financing?

The term for a construction loan that includes permanent financing is known as a Construction to Permanent Mortgage. This type of loan is designed specifically to cover the costs of building a new home and then convert into a permanent mortgage once construction is completed. The advantage of this structure is that borrowers do not have to go through the process of applying for a new mortgage after construction, simplifying the financing process and often saving on closing costs.

This type of loan typically provides a short-term solution during the construction phase, allowing funds to be drawn as needed to pay contractors and suppliers, and then seamlessly transitions into a long-term mortgage once the home is finished. This can be a valuable option for borrowers looking to minimize the complexities involved in their financing options.

Other types of loans mentioned do not fulfill the same role. For instance, bridge loans are usually short-term financing solutions intended to cover a gap between two transactions, such as buying a new home before selling the old one. Renovation loans are specifically tailored for borrowers looking to renovate an existing property rather than build a new one, and temporary financing generally refers to any short-term funding option that does not provide the same level of integration into a permanent mortgage.