Construction Management

The Construction Management form provides an efficient, centralized location for entering and viewing construction-related loan data and dates, as well as contact information for the construction loan.

Construction Loans Supported

Encompass supports the following types of construction loans:

Construction-Only - Construction-only loans finance the construction of a residential property. Encompass supports fixed-rate and ARM construction-only loans.
Construction-to-Permanent Transactions with Blended Disclosures - Construction-to-permanent transactions with blended disclosures finance the construction of a residential property and then convert to a permanent loan when the construction phase is complete. With blended disclosures, one Loan Estimate is disclosed at origination for the combined construction and permanent loan terms, and one Closing Disclosure is disclosed at closing for the combined construction and permanent loan terms. This is a one-time-close construction-to-permanent loan. Encompass treats the loan as a single transaction for billing purposes. Both Fixed-Rate-to-Fixed-Rate and Fixed-Rate-to-ARM transaction are supported:
- Fixed-Rate-to-Fixed-Rate - A fixed-rate construction loan that becomes a fixed-rate permanent loan. Encompass supports Fixed-Rate-to-Fixed-Rate transactions when both loans have the same interest rate or when both loans have different interest rates (step-rate).
- Fixed-Rate-to-ARM – A fixed-rate construction loan that becomes an ARM permanent loan. Encompass supports Fixed-Rate-to-ARM transactions only when the permanent phase of the transaction has the same initial interest rate as the construction phase.
Construction-to-Permanent with Separate Disclosures - Construction-to-permanent transactions with separate disclosures finance the construction of a residential property and then convert to a permanent loan when the construction phase is complete. With separate disclosures, two Loan Estimates are disclosed at origination (one for the construction phase and one for the permanent phase) and two Closing Disclosures are disclosed at closing (one for the construction phase and one for the permanent phase). Two loan files are created in Encompass, one for the construction portion and another for the permanent portion of the loan, but you link the two loan files and synchronize data between them. This is a one-time-close construction-to-permanent loan, and Encompass treats the loan as a single transaction for billing purposes. Encompass supports construction-to-permanent transactions with separate disclosures for the scenarios listed above for blended disclosures, plus the following additional loan scenarios:
- Fixed-Rate-to-ARM – A fixed-rate construction loan that becomes an ARM permanent loan on completion of the construction phase. Encompass supports Fixed-Rate-to-ARM loans with separate disclosures that have the same or different rates for the construction and permanent phases of the loan.
- ARM-to-Fixed – An ARM construction loan that becomes a fixed permanent loan on completion of the construction phase. Encompass supports ARM-to-fixed loans with separate disclosures that have the same or different rates for the construction and permanent phases of the loan.
- ARM-to-ARM – An ARM construction loan that becomes an ARM permanent loan on completion of the construction phase. Encompass supports ARM-to-ARM loans with separate disclosures that have the same or different rates for the construction and permanent phases of the loan.

Workflows

The Construction Management form is used with the following workflows:

For construction-only loans, create a single loan file in Encompass and use the Construction Management form to maintain and track the construction loan information.
For construction-to-permanent loans that use blended disclosures for the construction and permanent phases of the loan, create a single loan file in Encompass and use the Construction Management form to maintain and track the information for both the construction and permanent phases of the loan. Use the loan file to send disclosure packages, which include a single (blended) Loan Estimate that combines the construction and permanent phases of the loan and a single (blended) Closing Disclosure that combines the construction and permanent phases of the loan.
For construction-to-permanent loans that use separate disclosures for the construction and permanent phases of the loan, create a loan file in Encompass for the construction-only phase of the transaction. Then use the Construction Management form to link to a permanent loan file. You can create and link to a new permanent loan file or to link to a currently existing permanent loan file. After the two loans are linked, you can synchronize data between the files. Use the construction-only loan file to generate disclosures packages and closing documents. The disclosure packages include separate disclosure forms: two Loan Estimates (one for the construction phase and one for the permanent phase of the loan transaction) and two Closing Disclosures (one for the construction phase and one for the permanent phase of the loan transaction).

For detailed information about the workflows used for different types of construction loans, refer to the Process a Construction Loan help topic or click the links at the top of this topic.

To Access the Construction Management Form:

Click the Forms tab on the lower-left panel in a loan file, and then click Construction Management.
Or, on the menu bar, click the Forms menu and then click Construction Management.

Construction Management Tabs

The Construction Management tool includes four tabs:

Basic Info Tab

Loan Info Tab

Use the Loan Info tab to enter or view basic loan information and construction-specific fields. Many of the fields on this tab are populated based on data entered in other Encompass form, but Encompass users may need to complete some of the construction-specific fields. When one of the construction options has been selected for the Purpose of Loan (field ID 19), additional content is populated dynamically below the Additional Details section, based on the option selected. When an option is not selected for the Purpose of Loan, the area below the Additional Details section is blank.

Purpose of Loan

Select one of the following options for Purpose of Loan (field ID 19) depending on the type of construction loan you are processing:

Construction-only loan - Select the Construction checkbox on the Loan Info tab, if it is not already selected. When the checkbox is selected, a Construction Only section displays below the Additional Details section. Use the Construction Only section to enter and view information about the construction-only loan.
Construction-to-permanent loan with blended disclosures - Select the Construction-Perm checkbox on the Loan Info tab, if it is not already selected. When the checkbox is selected, a Construction - Perm (1x Close) section displays below the Additional Details section. Use the Construction - Perm (1x Close) section to enter and view information about the construction and permanent phases of the loan. This enables you to process both the construction and permanent phases of the construction-to-permanent loan from within the same loan file in Encompass.
Construction-to-permanent loan with separate disclosures - Select the Construction checkbox for the Purpose of Loan on the Loan Info tab and then select the Construction Perm Disclosed Separately checkbox. When you select both of these checkboxes, a Construction Only section displays below the Additional Details section and a Linked Loans tab displays on the Construction Management form.
Use the Construction Only section to enter and view information about the construction phase of the loan.
Use the Linked Loans tab to link the construction loan file to a separate loan file used to process the permanent phase of the loan.
When you process the construction-to-permanent loan, use the construction loan file to process the construction phase of the loan, used the permanent loan file to process the permanent phase of the loan, and use the synchronization functionality to synchronize data between the loan files.

Project Data Tab

Use the Project Data tab to track important construction dates and pre-closing requirements, to enter disbursement terms and vendor information, and to identify and enter the name and contact information for the borrower’s designee. Complete the Take Out Lender information if the loan is a construction-only loan and the permanent loan for the property is being financed by a different lender (the take-out lender)

Important Dates - Type or select the key dates listed in this section, and then type the number of days within which you must return the lender’s copy of the commitment.
Pre-Closing Requirements - Select the pre-closing requirements that apply, and then type or select the date when the requirement is received. To add a requirement that is not on the list, select Other and then type a description in the text field.
Disbursement Terms - Enter the disbursement terms for the loan funds.
Vendor Contact Information - Enter contact information for the architect, builder, and general contractor, or click the Address Book icon to add information from your business contact records.
Appointment of Designee - Enter the name and contact information for the designee, and then type or select the date when the designee accepted his or her appointment.
Take-Out Lender - Complete this section for construction-only loans when a different lender (the take-out lender) will be financing the permanent phase of the transaction.

Linked Loans Tab

When working with a construction-to-permanent loan with separate disclosures, use this tab to link a loan file for the construction phase to a loan file for the permanent phase of the loan. The Linked Loans tab is accessible when working with a construction-to-permanent loan that utilizes two loan files (one for the construction phase and another for the permanent phase) to provide separate disclosures. To access the tab, first create your construction-only loan file. On the Construction Management form, select the Construction Only checkbox on the Loan Info tab, and then select the Construction Perm Disclosed Separately checkbox to indicate that the construction-to-permanent transaction has separate disclosures.

Use the Linked Loans tab to link the construction-only loan file to a permanent loan file, enter and view key loan information for the linked loans, synchronize data between the files, and switch from the currently open loan file to the inked loan file.

Note: When two loans are linked, a Linked icon displays next to each of the loans on the Encompass Pipeline. A Linked icon also displays to the left of the Loan # in the Loan Summary area at the top of the loan file.

Link the construction-only loan file to a permanent loan file

Create a loan file that will be used to process the construction phase of the loan.
Complete as much information as possible on the Borrower Summary, 1003, 2015 Itemization, verifications, and other loan forms.
Order credit, an appraisal, and other services.
Link the construction loan to a new or existing permanent loan.

Link to a new permanent loan file

In the construction loan, click the Forms tab on the lower-left, and then click Construction Management.
On the Construction Management form, click the Loan Info tab.
For the Purpose of Loan, select Construction Only and then click Construction Perm Disclosed Separately.
Click the Linked Loans tab.
At the upper-left of the form, click New Perm.
If your Encompass administrator has created more than one Sync Template (templates that define the fields and verifications that are synchronized between the two loans), select a template and then click Select.
When the confirmation window displays, click Yes or No to select a synchronization option.

Note: If you select Yes, only the loan values from the fields and verifications specified in the sync template are copied to the newly created loan. Sync templates are configured by your administrator in the Sync Templates setting.

The loan file for the permanent phase of the construction loan is created and linked to the loan for the construction-only phase.
The new loan information displays in the Perm Loan column on the Linked Loans tab.
The new loan is added to your Pipeline.
On the Pipeline, a Linked icon displays in the Linked column for both of the linked loans.
Click or right-click the Linked icon to view the loan numbers for the linked loans.
Click or right-click the Linked icon, and then click Open Linked Loan to open the loan that is linked to the selected loan.
In a linked loan file, in the Loan Summary at the top of the loan file, a Linked icon displays to the left of the Loan #.
Click or right-click the Linked icon, and then click Go to Linked Loan to open the loan that is linked to the currently open loan.
Click or right-click the Linked icon, and then click Sync Data to synchronize data between the linked loans.

Link to an existing permanent loan file

In the construction loan, click the Forms tab on the lower-left, and then click Construction Management.
On the Construction Management form, click the Loan Info tab.
For the Purpose of Loan, select Construction Only and then click Construction Perm Disclosed Separately.
Click the Linked Loans tab.
At the top-left of the form, click Link to Perm.
Select a Loan Folder, select a loan, and then click Link.
If your Encompass administrator has created more than one Sync Template (templates that define the fields and verifications that are synchronized between the two loans), select a template and then click Select.
When the message window displays, click Yes or No to select a synchronization option.

The new loan information displays in the Perm Loan column on the Linked Loans tab.
On the Pipeline, a Linked icon displays in the Linked column for both of the linked loans.
Click or right-click the Linked icon to view the loan numbers for the linked loans.
In the Loan Summary at the top of a linked loan file, a Linked icon displays to the left of the Loan # along.

Remove a link

Enter and view key loan information

Synchronize data between linked loans

Switch from one linked loan file to another

Construction Management

Construction Loans Supported

Workflows

Construction Management Tabs

See Also: