The construction phase is the period of time your home is under construction. Once your home is complete, the loan moves to the permanent phase with payments of principal and interest.

Every construction phase is initially setup for 12 months. If you use less time, the loan will move to the permanent phase once your home is done. So you can’t ride out an interest only payment for the full 12-month period. Once it’s complete, the payment changes from interest only to principal and interest.

If more time is needed, a one-time extension of up to 6 months can be obtained if requested at no charge.