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Best Construction-to-Permanent Lender in NY: How to Choose
Last updated: October 29, 2026. Checked against the primary sources listed at the end of this guide.
There is no single "best" construction-to-permanent lender in New York for everyone. The best lender for you is the one that offers the loan program you need, lends where you are building, approves your builder, and runs a draw and inspection process you can live with. Compare at least a few lenders on the same checklist before you apply.
In New York, also ask how each lender handles the mortgage recording tax, attorney-led closings, and builders in places without a state contractor license.
Key takeaways
- Compare several lenders on the same checklist, and ask each one for a Loan Estimate for your project.
- New York has no statewide general contractor license, so each lender's builder review matters more.
- Closings are commonly attorney-led, and the mortgage recording tax is due when the mortgage is recorded.
- For a single-family home, lien claimants generally have four months after their last work to file.
- Check every lender and loan officer on NMLS Consumer Access before you apply.
What is a construction-to-permanent loan?
A construction-to-permanent loan pays for building a home and then becomes your regular mortgage once the home is finished. With a one-time close, you close once, before construction starts. Fannie Mae describes single-closing loans as closing "on both the construction loan and the permanent financing at the same time" (Fannie Mae Selling Guide B5-3.1-02).
FHA uses the same idea. HUD defines its Construction to Permanent program as combining a construction loan with a permanent mortgage "using a single mortgage closing prior to the start of construction" (HUD Mortgagee Letter 2019-08).
During the build, you usually pay interest on the money drawn so far. When the home is done, the loan converts to the permanent mortgage. See one-time close vs. two-time close for how the two structures differ.
What types of lenders offer construction-to-permanent loans in New York?
| Lender type | What to know |
|---|---|
| Banks | Many offer construction loans, often through a dedicated construction team. Program choices vary by bank. |
| Credit unions | Often lend in a set area and may keep construction loans in house. You usually need to join. |
| Mortgage companies | May offer FHA, VA, USDA, or conventional one-time close programs. Builder rules can be strict. |
| Mortgage brokers | Do not lend their own money. They shop your loan with lenders. See the CFPB's explanation of what a mortgage broker is. |
No lender type is always better. A local lender may know your town's septic and permit steps well. A national lender may offer more government-backed programs. What matters is how each lender handles your specific build.
What should I compare between construction lenders?
| What to compare | Why it matters | What to ask |
|---|---|---|
| Programs offered | Not every lender offers FHA, VA, USDA, or conventional one-time close. | Which construction programs do you offer in New York? |
| One-time or two-time close | Changes how many closings and how much paperwork you face. | Do you close once, or will I need a second loan when the home is done? |
| Builder approval | Most lenders must approve your builder before closing. | What do you need from my builder, and how long does approval take? |
| Draws and inspections | Draws release money as work is finished. Slow draws can stall a build. | How many draws are there, who inspects, and how fast are funds released? |
| Lien waivers | Unpaid contractors and suppliers may be able to file liens. | How do you collect lien waivers with each draw? |
| Land | Some lenders count land you already own toward the equity they require. | How do you value land I own or am buying? |
| Build timeline | Delays can cost money and create problems at conversion. | What happens if the build runs late? |
| Total closing costs | Fees and state or local transfer and recording charges vary. | Can I see a Loan Estimate for my project? |
| Local experience | Septic, wells, flood zones, and local permits differ across New York. | Have you financed builds where I am building? |
The CFPB explains that you get a Loan Estimate after you apply. It is the easiest way to compare lenders on the same project.
What questions should I ask every lender?
- Do you offer a one-time close construction-to-permanent loan for my type of home (site-built, modular, or manufactured)?
- Do you lend where I am building, and have you closed construction loans there recently?
- What do you require from my builder, and do you allow owner-builders?
- How does the draw schedule work, and who orders the inspections?
- Do you require a contingency reserve for overruns?
- How do you treat land I already own?
- What happens if construction takes longer than planned?
- Who handles the closing in New York, and what title steps will you need?
- What documents will you ask me to update before the loan converts?
- Can you give me a Loan Estimate based on my plans and budget?
What New York rules affect your lender choice?
| Topic | New York rule | Where to check |
|---|---|---|
| Builder license | None statewide; some localities license | Town, county, or NYC Department of Buildings |
| Building code | 2025 Uniform Code outside NYC; NYC codes in the city | Local building department |
| Septic and wells | County or local health department | County health department |
| Flood zone | FEMA flood maps; lender flood rules | FEMA Flood Map Service Center |
| Mechanics' liens | Lien Law § 10: four months for a single-family home | County clerk |
| Mortgage recording tax | Paid when the mortgage is recorded | NYS Tax Department |
| Closing | Attorneys commonly | Your closing attorney |
| Lender licensing | NYS Department of Financial Services | NMLS Consumer Access |
What is different about building in New York?
Does my builder need a license in New York?
New York doesn't issue a statewide general contractor license. Licensing is local, and some places license or register contractors, including New York City through its Department of Buildings (NYC Department of Buildings). Ask your town or county what applies, and expect your lender to run its own builder review. See how builder approval works.
With no state license, acting as your own general contractor isn't barred by licensing, but many lenders won't finance an owner-builder. Read more about owner-builder construction loans.
How are construction loan closings handled in New York?
New York closings are commonly handled by attorneys. New York charges a mortgage recording tax when the mortgage is recorded (NYS Tax Department, mortgage recording tax), and a real estate transfer tax when the deed is recorded (NYS Tax Department, real estate transfer tax). Ask your attorney and lender how the recording tax applies to your construction loan.
Do I need septic and well approvals in New York?
If the lot has no public sewer or water, expect your county or local health department to review and approve the septic system and water supply before construction. Requirements vary by county, so ask early. Lenders usually want those approvals before closing or before the first draw.
What about flood zones in New York?
Check your lot on the FEMA Flood Map Service Center. If the home sits in a high-risk flood area, the lender will generally require flood insurance. Coastal and lakefront lots can also need local or state environmental reviews, so ask your town early.
How do mechanics' liens work in New York?
For a single-family home, a notice of lien generally must be filed with the county clerk during the work or within four months after the last work or materials (N.Y. Lien Law § 10). Other properties get eight months. Lenders collect lien waivers as each draw is paid.
For permits, codes, and the full step-by-step list, see construction loan requirements in New York.
Are there state homebuyer programs for building in New York?
The State of New York Mortgage Agency (SONYMA) offers homebuyer programs through participating lenders (SONYMA). Ask whether a program can be used with new construction before you plan around one.
How do I check that a lender or loan officer is licensed in New York?
Look them up on NMLS Consumer Access, the national registry for mortgage companies and loan officers.
The New York State Department of Financial Services licenses mortgage bankers and loan originators and registers mortgage brokers (NYS DFS, mortgage companies).
What are red flags when choosing a construction lender?
- They can't explain how draws, inspections, and lien waivers work.
- They won't review your builder until after you commit.
- They push you to skip the Loan Estimate or to sign before you understand the costs.
- They have no experience with septic, wells, or rural lots and your lot needs them.
- They don't appear in NMLS Consumer Access.
What should I have ready before I talk to lenders?
- Recent pay stubs, W-2s or tax returns, and bank statements
- Your lot details: deed or purchase contract, survey, and any septic or soil reports
- Plans, specifications, and a line-item budget from your builder
- Your builder's license or registration, insurance, and references
- A rough timeline from permits to move-in
Where can I start?
Compare a few lenders side by side. Our list of New York construction loan lenders is a starting point, and you can compare construction loan options by program. Building somewhere else? See our construction loan guides by state.
Frequently asked questions
Who is the best construction-to-permanent lender in New York?
There is no single best lender for everyone. The right fit depends on the program you need, where you are building, your builder, and how the lender handles draws. Compare several lenders on the same checklist.
Do I need an attorney to close a construction loan in New York?
New York closings are commonly handled by attorneys, and many buyers have their own. Ask your lender how its closings work.
Does a New York builder need a license?
New York has no statewide general contractor license. Some localities license contractors, including New York City.
Can I use an FHA or VA construction-to-permanent loan in New York?
Often, yes, but not every lender offers them. FHA's program requires a licensed builder, and VA construction loans require a lender that offers them. Ask each lender which programs it closes in New York.
How do I check if a construction lender is licensed in New York?
Search the lender and the loan officer on NMLS Consumer Access. In New York, the New York State Department of Financial Services oversees mortgage lender licensing.
Sources
- Fannie Mae Selling Guide B5-3.1-02
- HUD Mortgagee Letter 2019-08
- what a mortgage broker is
- Loan Estimate
- NYC Department of Buildings
- NYS Tax Department, mortgage recording tax
- NYS Tax Department, real estate transfer tax
- FEMA Flood Map Service Center
- N.Y. Lien Law § 10
- SONYMA
- NMLS Consumer Access
- NYS DFS, mortgage companies
Ready to compare New York lenders?
Tell us about your lot, your builder, and the kind of home you want to build. Get connected at My Construction Path, and we'll connect you with lenders who offer construction-to-permanent financing in New York.
My Construction Path is not a lender and does not make loans or credit decisions. Not all borrowers will qualify. Equal Housing Opportunity. Requirements vary by lender, loan program, and location. This article is for general education and is not a commitment to lend. It is not a quote of rates, payments, or loan terms.