Construction to Permanent Loans

Does anyone have any information regarding these? Is it possible for an investor to use this type of financing to purchase a home and receive the equity in the home be it 25-50k whatever the amount of equity it is, in the form of HELOC at closing?

A construction-perm loan is a form of financing that provides funds to build a house and then once complete the outstanding loan balance rolls into a permanent loan, say 30yr mortgage. It has nothing to do with buying existing homes or taking the equity out in the form of a HELOC.

I understand that aspect of construction to permanent loans, but I was told that there is a construction to perm loan product that will allow the buyer to pull the equity out of the home in the form of a HELOC at closing, when the home is complete. Does anyone have any knowledge of this?

What you might be referring to is an interim loan. Otherwise knows as a 2X close. You would finance the interim loan and then refinance it into a permanent loan after it is completed. At that point you could take out a HELOC. On a 1X close you are closing before the house is built and you typically will not have that much equity at closing. Lenders on 1X close loans are starting to review tolerance levels on loans. They take take the cost to construct new (from the appraisal) and divide it by the contract price. If the difference is greater than 20% you have to request an exception. I hope that answers your question.