PROCESS SMOOTH & SEAMLESS

by Christy Heitger-Ewing / photos by Adam Gibson

Building a house is an exciting adventure –from picking out the perfect lot to hiring a builder and making exterior and interior selections. Whether that all goes smoothly has a great deal to do with the construction loan process, and no one is better versed in this area than the team at Teachers Credit Union (TCU).

TCU is Indiana’s largest Credit Union, with more than 50 branches throughout Indiana and southwest Michigan (nearly 20 of which are in central Indiana). Founded in 1931 for teachers, TCU is not just for teachers anymore. Anyone who qualifies can join if they live/work within a certain geographic location. TCU offers traditional financial services including checking, savings, mortgages, and credit cards, as well as non-traditional services such as investments. Since its inception, TCU has focused on making a positive impact on its members and the community. For 26 years, Albert Gonzalez has been working in mortgage origination, and never has he felt more at home than at TCU.

“TCU is the best lending partnership I’ve had in my career,” says Gonzalez, who joined the team in 2021. Roughly 80% of his work is financing new construction homes. When he gets a referral from a potential client, the first thing he does is pick up the phone to personally connect.

“We have an online application option, but I prefer a call so we can get to know each other,” says Gonzalez. “I fill them in on fun things to do in Indianapolis. If they’re moving to, say, Chatham Hills in Westfield, I’ll talk about Grand Park and some of the amenities there.”

In that initial call, he goes over standard questions about income, assets, credit, and employment. Gonzalez then determines whether the loan will meet approval requirements, then sends the client a list of things they’ll need such as pay stubs, tax returns, bank statements, retirement statements, and homeowners insurance. Once he gets the green light to move forward, the builder, who is selected by the homeowner, provides a contract. Following that contract, TCU requests plans, specs, and drawings.

Once the appraisal is ordered through TCU’s construction appraisal panel, one of TCU’s select four expert construction appraisers takes a photo of the site and provides sales comparisons for homes that have sold that are in like size, shape, condition, and proximity.

For construction loans, TCU often uses a cost approach value on an appraisal report, which adds the cost of the lot and the cost to construct the home to obtain a total acquisition number. Throughout this entire process, the homeowner is in close communication with TCU’s mortgage construction coordinators Meghan Johnson and Heather Friesner. When TCU gets the clear to close, they send closing instructions to the title company. Two to three days prior to closing, Friesner sends electronic closing documents via Snapdocs, an e-closing platform that mortgage lenders use to manage their closings. This gives homeowners plenty of time to review the documents and electronically sign them. Being able to sign 90% of the closing documents prior to closing means that on the day of closing, clients only have to sign the documents that need to be recorded within the county (e.g., mortgage, note, closing disclosure, name affidavit, and property exemption paperwork).

“I’ve found that our members love this process,” says Gonzalez. “The convenience is such a huge selling point.”

TCU is one of only a handful of lenders in state that utilizes this platform.

Another convenience TCU offers is mobile closings at remote locations.

“I just did a closing at a physician’s house because she had to work late,” says Gonzalez. “Not everybody offers that.”

Speaking of closings, TCU also does a one-time close on the front side of construction. Another huge plus is interest-only payments during the construction phase, which means that the homeowner only pays interest on the money that has been dispersed to the builder.

“For example, if we close on a $2M loan and that first draw is $200K, you only pay interest on the $200K until the next draw,” says Gonzalez.

Once the loan is closed, the home building begins! Over the course of the next 30-60 days, the builder requests a draw so he can begin pouring the foundation or building the basement. TCU sends an email to the client for authorization. Megan Snyder, a construction mortgage processor from TCU, and Lindsay Eastman, a mortgage construction coordinator, handle most of the draw requests. Once the borrower authorizes the draw, TCU distributes funds to the builder. These draws, by the way, are released within 24 to 48 hours after client approval, which is lightning fast compared to others in the industry.

“Builders love that,” says Gonzalez, who is proud to work closely with the Builders Association of Greater Indianapolis (BAGI), the Greater Indianapolis Mortgage Bankers Association (GIMBA), and the Metropolitan of Indianapolis Board of Realtors (MIBOR).

“These three associations are instrumental in advising people where to go for resources, guidance, direction, membership, and community involvement,” says Gonzalez.

The next step involves sending an inspector to the property to be sure the draw matches the progress of the home. Once the draw schedule is completed and all draws have been made, a certificate of occupancy is issued.

Often a consumer will own a home with significant equity in it; once they sell that home, they can transfer that equity or pay down the principal balance and TCU will re-amortize their monthly payments to reflect that lower principal balance.

“That’s a nice amenity we offer,” says Gonzalez.

In certain situations, a home is unable to be completed – say, in the wintertime when a driveway can’t be poured, or sod can’t be planted. Such items can be pushed to the spring and TCU will hold those funds in escrow until it’s weather appropriate.

Again, it’s all part of TCU’s commitment to making a positive impact on its members and the community.

TCU has nearly 20 locations in and around the Indianapolis area. Get started on your construction game plan by calling Gonzalez directly at (317) 605-3383 or by visiting tcunet.com/agonzalez to apply online. The TCU team can be reached at (317) 572-2326.

Equal Housing Opportunity. NMLS #686706

Subject to membership requirements. APR = Annual Percentage Rate. Rates and terms vary depending on loan to value ratio, credit evaluation and underwriting requirements. All Credit Union loan programs, rates, terms, and conditions are subject to credit approval and may change at any time without notice. Private Mortgage Insurance, flood and/or property hazard insurance may be required. Payments examples do not include taxes or insurance premiums; the actual payments will be higher. Rates provided are based on current market rates and are informational only. Construction loans are construction-to-permanent, with construction period up to 24 months. Interest only payments during construction period. Fees may apply for extended rate lock. Builder qualifications subject to lender review. Payment example after construction assumes 20% down on a fixed-rate loan of $1,000,000 for 30 years at 6.875% rate (6.893% APR), will have payments of $6,569.29. Payment doesn’t include the interest-only construction phase period.