Construction to Perm Loan Options

[Srikanth Raj]

Hi Everyone,

I am looking to buy an investment property in FL but its not yet built. The build will take approximately 10 months once started. I was told taking a Construction to Perm Loan would be one of the option for me but thats ONLY possible if I am using it as a second home and its NOT offered for investment property. I would NOT be able to satisfy the second home criteria to occupy it for a month atleast in a year. So I am planning to take a Construction to Perm loan during the construction process and then planning to refinance it into a conventional loan so that I dont need to satisfy the second home criteria. Few disadvantages I can see here are : 1. I have to pay closing costs twice once during construction to perm loan and one during refinancing 2. The rates may increase during refinance after 10 months when the house is complete affecting my cash flow 3. The appraisal during refinance may come in low that could result in me paying more Out of pocket during refinance as down payment. Is my understanding about the whole thing correct and are there any other options I could pursue ? Note: I cannot afford 20% for the property as down payment but can afford 10% as down payment which is possible while buying as a second home.

Thanks in advance!