source:
  type: guide
  id: fnma-sel-b5-3.1-01
  authority: 'Fannie Mae Selling Guide B5-3.1-01 — Conversion of Construction-to-Permanent
    Financing: Overview'
  description: 'Fannie Mae Selling Guide B5-3.1-01 — Conversion of Construction-to-Permanent
    Financing: Overview.'
  coverage_tier: operative
obligations:
- id: fnma-sel-b5-3.1-01-full
  canonical_id: fnma-sel-b5-3.1-01-full
  section: 'Fannie Mae Selling Guide B5-3.1-01 — Conversion of Construction-to-Permanent
    Financing: Overview'
  type: do
  tags:
  - regulator-direct
  - fnma
  - selling-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: 'Fannie Mae Selling Guide B5-3.1-01 — Conversion of Construction-to-Permanent
      Financing: Overview'
    source_class: fnma-guide
    source_url: https://singlefamily.fanniemae.com/media/document/pdf/selling-guide
    snapshot_id: 5f7b8b79da595d76
    fetched_at: '2026-05-25T14:09:57Z'
    content_hash: sha256:98cf85a02861bbe84914a0e339b327c8fc131869a8a573882007bbeea60c5701
    paragraph_quote: 'B5-3.1-01, Conversion of Construction-to-Permanent Financing:
      Overview (06/04/2025) Introduction This topic contains an overview of conversion
      of construction-to-permanent mortgage loan ﬁnancing. Conversion of Construction-to-Permanent
      Financing Overview Uniform Appraisal Dataset (UAD) 3.6 Policy Conversion of
      Construction-to-Permanent Financing Overview The conversion of construction-to-permanent
      ﬁnancing involves the granting of a long-term mortgage to a borrower for the
      purpose of replacing interim construction ﬁnancing that the borrower has obtained
      to fund the construction of a new residence. Construction-to-permanent ﬁnancing
      can be structured as a transaction with one closing or a transaction with two
      separate closings. The borrower must hold title to the lot, which may have been
      previously acquired or be purchased as part of the transaction. All construction
      work, including any work that could entitle a party to ﬁle a mechanic''s or
      materialmen’s lien, must be completed and paid for, and all mechanic''s liens,
      materialmen’s liens, and any other liens and claims that could become liens
      relating to the construction must be satisﬁed before the mortgage loan is delivered
      to Fannie Mae. The lender must retain in its individual loan ﬁle a Form 1004D
      or a completion alternative of the completed property. When a construction-to-permanent
      mortgage loan provides funds for acquisition or reﬁnancing of an unimproved
      lot and the construction of a residence on the lot, the lender must retain a
      certiﬁcate of occupancy or an equivalent form from the applicable government
      authority. The lender must use Fannie Mae''s uniform mortgage instruments to
      document the permanent mortgage. These documents may not be altered to include
      any reference to construction of the property, other than any alteration that
      Fannie Mae speciﬁcally requires. Attached units in a condo project and all co-op
      properties are ineligible for construction-to-permanent ﬁnancing. Detached units
      in condo projects are permitted for construction-to-permanent ﬁnancing, including
      manufactured homes in a condo project (subject to applicable project review
      requirements). For guidance on data entry for construction-to-permanent transactions
      in DU, see the related Desktop Underwriter Job Aid. Uniform Appraisal Dataset
      (UAD) 3.6 Policy Lenders using UAD 3.6 must follow the requirements in the UAD
      3.6 Policy Supplement . Recent Related Announcements The table below provides
      references to recently issued Announcements that are related to this topic.
      Published May 6, 2026 719 Announcements Issue Date Announcement SEL-2025-04
      June 04, 2025 Announcement SEL-2023-02 March 01, 2023 Announcement SEL-2019-07
      August 07, 2019'
  judgment: false
