New to the Board + Question

[Pax]

Hello everyone,

I'm new to the boards, but we bought the 20' farm house plans from this site and will start building hopefully this month.   We're decreasing the size way down and adding a basement and full loft.  So the total square footage including the basement will be under 1000.  

Question:  How much is "enough" for the inspector so that we can make the transition from Construction Loan to standard mortgage and drop the construction portion of our insurance?  

We are hiring a contractor to do the heavy lifting, but we can do flooring and painting and cabinets.  

We're hoping to have the contractor do all plumbing fixtures, electrical, insulation, sheetrock and the exterior.  

Is that going to be enough or does the house have to be finished to be done to meet the building codes?  

Thanks,
Danielle

[glenn kangiser]

Hi Danielle. welcome to the forum.

Local jurisdictions have different requirements or things they allow  but many will not allow occupancy until the house is nearly complete or complete.

I would say the only way to know for sure is to ask your public servants, the building officials in control of your area.

[Pax]

Sigh...  I don't like that there are building officials in control of my area.    

Thanks for that.  It helps.  It is frustrating to try to build from such a distance.  We are 3000 miles away from the place.  Huh...  

Well, we shall see.  Thanks for the post.

Danielle

[John Raabe]

Where you have a loan officer involved you probably have them to satisfy more than the building department.

At least in many rural areas building inspectors give folks some slack on living in a house where the final inspection has not been completed. My inspector waited a year before coming around and giving me the same to-do list I already knew about (plus one safety requirement I hadn't caught).

The bank however always asks themselves, "if this guy dies tomorrow, can we sell this place for more money than we have into it?" That means the place generally has to be spec house builder done before the sign off is made to the LT mortgage.

[Pax]

Ya' know, that's a legitimate concern on the bank's part.  I hadn't thought of that.  

This will be a rural place, very rural...

Thanks

[Doug Martin]

You need to research two items:

1) If the lender will convert from the construction loan when the certificate of occupancy (CO) is given
2) What the minimums are for a CO

In Massachusetts they are (copyied and pasted from a nearby towns website):

1. Dwellings must have operable kitchen, bathroom and heating system.
2. All smoke detectors and heat sensors must be operable.
3. Safety features must be complete. (i.e. handrails on stairs and decks, proper egress (exits).)
4. Certificate of Compliance for private septic system from the Board of Health.

That is on top of the minimum requirements before a building permit is issued, like a clean water source, etc.

I'd do as much work as you can before you move in - working on a building you are living in takes much longer.

[desdawg]

Here the lenders use appraisers. First they appraise the property before you start and add an estimated value based on what you are building. Then when you are financed for construction they will require photos of progress, subcontractor invoices, material invoices, lien waivers, etc. for draws. At the end of the road the appraiser comes back and does a proper appraisal of the finished product. When all is as it should be the transition to permanent financing can take place. What John said, the lender will be covered at all times.