Construction‑to‑Perm Loans for Building on 37046 Acreage

Dreaming of a custom estate on rolling College Grove acreage? You’re not alone. The 37046 area offers privacy, views and space, but turning raw land into a finished home requires the right financing and a smart plan. In this guide, you’ll learn how construction‑to‑permanent loans work, what to verify on Williamson County land, how draws and interest operate, and the steps to move from dirt to keys with fewer surprises. Let’s dive in.

Construction‑to‑permanent basics

A construction‑to‑permanent (CTP) loan wraps your land purchase, construction funding and long‑term mortgage into one closing. During the build, the lender releases funds in stages. Once the home is complete and you have your final approvals, the loan converts to your permanent mortgage.

One‑close vs two‑close

• One‑close CTP: You close once, lock or float your mortgage rate per lender options, and convert automatically at completion. It’s simpler administratively and avoids a second round of closing costs.
• Two‑close: You take a short‑term construction loan, then close a separate permanent mortgage later. You can shop rates at the end, but you’ll repeat underwriting and pay a second set of closing costs.

Common programs

• Conventional CTP: Widely used for custom estates. You’ll need strong credit, a solid down payment and a licensed builder.
• VA and FHA: Some channels offer construction options with special rules for eligibility and builders.
• USDA: Rural programs exist for owner‑occupied homes in qualifying areas, but not all support CTP. Availability varies.

Practical takeaway: Product terms can differ by lender. Work with lenders experienced in CTP loans for acreage in Williamson County.

Typical down payment and credit

• Down payment: Plan for roughly 10 to 25 percent depending on the program, your land status, and whether the lender uses loan‑to‑cost or loan‑to‑value.
• Credit and reserves: Expect stronger credit standards and cash reserves. Construction carries more risk, so lenders underwrite conservatively.
• Owner‑builder: Many lenders will not allow you to serve as your own general contractor. A licensed, experienced builder is often required.

Due diligence for 37046 acreage

Acreage is special. It can be spectacular, but it also comes with septic needs, sloped topography, driveway and access questions, utility extensions, and possible easements or restrictions. These factors affect feasibility, cost and your appraisal.

County checkpoints to verify

In Williamson County, confirm these items early:

• Building permits and inspections: Check permit requirements and inspection schedules with the county Building & Codes office.
• Septic and environmental: Confirm percolation testing, septic system feasibility and permit process with the county environmental or health department.
• Water and well: Verify water availability. If a well is needed, review state and county requirements for permitting and suitability.
• Zoning and setbacks: Confirm zoning classification, minimum lot size, setbacks, accessory structures and land use rules with county planning.
• Access and roads: Document legal ingress/egress. Note if the road is private or county‑maintained and whether driveway permits are required.
• Floodplain, wetlands and easements: Review FEMA flood maps and county GIS. Recorded easements or conservation restrictions can limit the buildable area.
• Utilities: Assess availability and the cost to bring electricity, gas (often unavailable on rural parcels), internet and any sewer. Many acreage sites will require septic.

Site assessments to obtain

• ALTA/NSPS boundary survey.
• Topographic survey to plan driveway, pad and grading.
• Soil report plus septic feasibility and perc test results.
• Well feasibility or confirmation of nearby rural water service.
• Driveway permits and right‑of‑way confirmation.
• Utility run estimates to the building pad.

Land and contract pointers

If you are purchasing land and building with one CTP loan, the lender will underwrite the combined land plus completed home value. If you buy land before the loan is approved, include a financing contingency in your land purchase contract to protect yourself.

How your CTP loan works during the build

Understanding the mechanics helps you plan cash flow and avoid delays.

Draws and inspections

• Lenders release funds in stages tied to milestones like foundation, framing, mechanical rough‑ins, insulation and drywall, finishes, and final completion.
• Expect about 5 to 10 draws on a custom estate. Each draw usually requires an inspection or third‑party verification.
• Many lenders hold a 5 to 10 percent retainage from each draw until final completion to cover punch‑list items and reduce lien risk.

Interest during construction

• You pay interest only on funds disbursed, not the full loan amount.
• Some loans include an interest reserve built into the financing; others require you to make monthly interest payments out of pocket. Confirm which structure your lender uses and how interest is calculated.

Appraisal and value

• The appraisal is based on the “as‑complete” value of the home plus land.
• Appraisers use your plans, specifications, builder budget and comparable sales of finished homes.
• On acreage, comparable sales can be limited. Detailed plans, accurate costs and strong comps help reduce appraisal surprises.

Rate lock options

• Some lenders let you lock the permanent rate at the CTP closing.
• Others allow you to float and lock later at conversion. This exposes you to rate changes during construction.
• Certain products offer a one‑time float‑down if market rates improve. Ask about terms and fees for lock, extension or modification.

Budgeting, contingencies and change orders

• Builder contingency: Many contracts include a 5 to 10 percent contingency line to cover unforeseen items.
• Overruns: If costs rise, the gap is typically covered by your contingency, your added cash, or lender‑approved change orders. Lenders are conservative about increases that affect the loan amount and may require reappraisal.
• Controls: Use clear allowances and a strict change‑order process so you approve cost impacts before work proceeds.

Choosing and vetting your builder

Your builder is central to financing approval and your project’s success.

Lender requirements

Many lenders require builders to be licensed and insured, with experience delivering similar custom homes on time. Lenders may request builder financials, references and confirmation of bonding. Owner‑builder setups are often not allowed.

Documents to collect

• License and any specialty certifications.
• General liability and workers’ compensation insurance, plus evidence of builder’s risk coverage or confirmation your policy will cover construction.
• Portfolio of similar projects and client, supplier and lender references.
• Subcontractor list with licenses and insurance.
• Detailed contract with schedule of values, milestones, payment schedule, warranty, and change‑order procedures.
• Lien history and a plan to provide lien waivers with each draw.

Contract types to consider

• Fixed price: Maximum cost certainty. Changes go through formal change orders.
• Cost‑plus: You pay actual costs plus a fee. More flexible but less predictable.
• Guaranteed maximum price (GMP): The builder caps the total, offering protection if scope is well defined.

Inspections and lien waivers

Tie payments to verified milestones. Use lender‑approved or independent inspectors for draw sign‑offs. Require lien waivers from the builder and subs at each draw to reduce mechanic’s lien exposure under Tennessee law.

Timeline and cost expectations

• Pre‑construction and underwriting: 30 to 60 or more days to finalize plans, budgets, surveys and approvals.
• Construction phase: 6 to 18 months for a custom estate on acreage, depending on size, complexity and seasonality.
• Conversion to permanent: After final inspection, occupancy and appraisal, conversion usually takes a few weeks.

Expect cash needs for:

• Upfront site items: plans, permits, surveys, soils, septic or well fees, and early site work like driveway and grading.
• Lending: origination, underwriting, closing costs, inspection fees and any interest reserve.
• Insurance and taxes: builder’s risk or appropriate coverage during construction. Property taxes on land may be billed separately before the home is complete.
• Contingency: Keep 5 to 10 percent reserved for surprises.

Risks to plan for and how to reduce them

• Permit or site delays: Start county checks early and align your schedule with permit lead times and inspections.
• Utility constraints: Get quotes to extend utilities before you commit and fold those costs into the budget.
• Cost overruns: Favor fixed price or GMP contracts, maintain your contingency, and control change orders.
• Builder performance: Check financial stability, consider performance bonds on large projects if available, and use retainage tied to verified milestones.
• Appraisal shortfall: Strengthen your file with detailed plans, accurate costs and quality comps. Be ready with additional cash if needed.
• Mechanic’s liens: Require lien waivers, pay subs promptly through the draw process, and confirm releases before final disbursement.

Step‑by‑step: Dirt to keys in 37046

1. Pre‑qualify

• Speak with lenders who routinely finance CTP loans on Williamson County acreage. Ask about one‑close vs two‑close, rate‑lock choices, float‑down options, interest reserves and builder approval requirements.

2. Land due diligence

• Order an ALTA survey, topographic survey, soils and perc testing, and septic feasibility.
• Confirm utilities, access, zoning, setbacks, covenants and any floodplain with county offices.
• Obtain estimates to bring utilities and a driveway to your pad.

3. Select your builder

• Choose a licensed, insured builder with recent, similar custom projects. Favor a fixed price or GMP contract with clear milestones and warranty terms.

4. Apply for your CTP loan

• Submit plans, specs, the signed builder contract, schedule of values, surveys, bids and builder credentials.

5. Close

• Close your one‑close CTP or the construction loan in a two‑close setup. Confirm rate‑lock terms and any float‑down in writing.

6. Build and manage draws

• Request draws at milestones after inspections. Monitor budget, approve change orders carefully, and collect lien waivers.

7. Completion and conversion

• After final inspections, occupancy and the final appraisal, your loan converts to the permanent mortgage or you close the permanent loan in a two‑close path.

8. Move in and manage warranty

• Track your punch‑list and warranty items with the builder over the agreed period.

Quick document checklist

Collect these early to speed underwriting and avoid delays:

• Lender prequalification and your CTP loan contact.
• ALTA survey, site plan, soils and perc reports.
• Full plans and specifications.
• Signed builder contract with schedule of values and payment schedule.
• Builder license, insurance certificates, references and subcontractor list.
• Permits checklist and status with Williamson County.
• Title report plus any recorded easements or restrictions.
• Detailed budget with contingency and allowances.
• Evidence of funds for your down payment and reserves.

Ready to build in College Grove?

If you’re planning a custom estate on 37046 acreage, you deserve a calm, well‑coordinated path from land to move‑in. Our team pairs deep Williamson County experience with hands‑on vendor coordination to help you confirm land feasibility, align the right builder, and navigate CTP financing with confidence. Let’s talk about your goals and timeline so we can map your next steps together.

Connect with the Mary Brown team at Unknown Company to start a land‑and‑build consultation today.

FAQs

What is a construction‑to‑permanent loan and how does it differ from a two‑close loan?

• A CTP loan combines land, construction and the permanent mortgage into one closing, while a two‑close requires a separate construction loan and a second closing for the permanent mortgage.

How much down payment should I plan for a College Grove acreage build?

• Many buyers plan for roughly 10 to 25 percent, depending on the lender, program, and whether the lender measures loan‑to‑cost or loan‑to‑value.

Do I need a licensed builder to qualify for a CTP loan in Tennessee?

• Most lenders require a licensed, insured builder with relevant experience and often do not permit owner‑builder arrangements.

How are interest payments handled during construction on a CTP loan?

• You typically pay interest only on funds disbursed, either via a built‑in interest reserve or monthly out‑of‑pocket payments as set by the lender.

What septic and utility checks should I complete on 37046 acreage before I finance?

• Complete a perc test and septic feasibility, confirm water or well options, verify legal access and driveway permits, and obtain cost estimates to extend electricity and other utilities to the building site.