Montana, USA, August 26, 2025
News Summary
Mortgage brokers are increasingly pursuing one‑time close construction loans across FHA, VA, USDA and conventional products to serve first‑time buyers and new home builders. The single‑closing structure reduces fallout risk, lowers upfront cash needs, and pays brokers at one permanent close rather than a separate refinance. Meanwhile, a $1.44 billion DOE loan guarantee for a Montana renewable fuels expansion has been unfrozen with an initial $782 million draw, and a regional Montana bank reported solid Q2 earnings driven by loan growth and wider net interest margins. Builders, brokers and buyers must manage documentation and builder approvals to convert inquiries into funded builds.
One-close construction loans gain traction as brokers seek new revenue; major Montana energy loan resumes and regional bank posts solid quarter
Mortgage brokers and loan officers are increasingly targeting one-time close construction loans as a way to open new pipelines of business amid a tough market for first-time buyers. At the same time, a large federal loan for a Montana renewable fuels project has been restarted after a brief freeze, and a Montana-based bank holding company reported stronger second-quarter results that reflect rising mortgage activity and loan growth.
Why brokers are focusing on construction lending now
First-time buyers continue to struggle with higher mortgage rates and tight household budgets. Housing inventory has risen, but new home construction is moving more slowly, leaving an opening for brokers who can help buyers finance building a home. One-time close construction loans package the construction and permanent financing into a single closing, which can lower costs and reduce refinancing risk for buyers and brokers alike.
A regional wholesale lender that offers one-time close loans for FHA, VA, USDA and conventional programs reports steady weekly interest in these products. The lender fields at least ten new inquiries each week about construction lending and down payment assistance. Many borrowers want to build from scratch, and more originators are learning that construction lending can be a lucrative niche.
For brokers, the single-close approach reduces the risk of losing the deal at a second closing because the permanent loan is guaranteed at the start. Brokers and loan officers are paid at closing, rather than waiting until the build is finished. Consumers benefit from fewer closing costs, and lenders avoid the uncertainty of requalifying borrowers after construction.
How these loans work and what brokers should watch
From the buyer’s perspective, the process is similar to purchasing an existing home when the builder is approved. Some agency construction products require no payments during the build period, while others require interest-only payments. Under FHA construction programs, borrowers may make no payments during typical construction timelines such as six, nine or 12 months. Conventional construction loans often use interest-only payments during construction. FHA new-construction loans can require a 3.5 percent down payment. VA and USDA programs can enable zero-down financing for dirt-up construction under eligible conditions.
Operationally, construction lending is a dual-track process for brokers because both underwriting and a construction department must clear documentation and conditions. Originators who learn the paperwork flow and promote these skills can differentiate themselves from peers who focus only on standard purchase loans.
Montana Renewables loan moves forward after pause
A guaranteed federal loan facility of $1.44 billion for expansion of a Montana renewable fuels project was resumed after a brief federal review. The financing closed late in the previous administration and was briefly delayed pending a White House priorities review. Officials said initial disbursement of approximately $782 million was available to fund eligible past expenses, and remaining funds are structured as a delayed-draw construction facility to be released during the build phase beginning in 2025 through a planned 2028 completion.
The project will expand sustainable aviation fuel capacity to about 300 million gallons per year and a combined 330 million gallons of SAF and renewable diesel when finished. Construction plans include adding a second fuels reactor so roughly half of the new SAF output could be online by 2026, along with upgrades to hydrogen, cogeneration, blending, logistics and water treatment systems. Debt terms include a 15-year span with interest pegged to the U.S. Treasury rate plus 0.375 percentage points and principal and interest servicing deferred until commissioning.
The parent company plans to make an additional equity injection of $150 million, while the balance of the loan will fund the staged construction. The borrower has also sought local tax relief on new equipment worth about $6.1 million under a state law that permits abatement for renewable fuels investments, while several tax appeals and a dispute over pollution-control exemptions remain pending before state authorities.
Regional bank posts stronger mortgage activity and improved margins
A Montana bank holding company reported $3.2 million in net income for the second quarter of 2025, matching the prior quarter and up from $1.7 million a year earlier. Assets rose to about $2.14 billion, and deposits climbed to $1.74 billion. The company declared a quarterly cash dividend of $0.145 per share, payable in September to shareholders of record in mid-August, equating to an approximate annualized yield of 3.32 percent.
Loan growth was broad-based: total loans increased year over year, commercial real estate and agricultural loans posted double-digit gains, and new residential mortgage originations rose to $78.6 million in the quarter with sales of $54.6 million in loans. Net interest margin improved to 3.91 percent, supported by higher yields on earning assets and modestly lower funding costs. Noninterest income and mortgage banking income also rose, driven in part by gains on sale of mortgage loans.
The bank recorded a one-time provision for credit losses of $1.0 million in the quarter, while the allowance for credit losses remained well above nonperforming loans. Management noted a shift in deposit mix toward higher-yielding products amid the sustained rate environment but expects deposit pricing to moderate over time as certificates of deposit reprice.
What to watch next
- Whether more wholesale and retail lenders expand one-time close construction programs for FHA, VA, USDA and conventional products;
- Disbursement schedule and local permitting or tax rulings tied to the Montana renewable fuels project as construction advances from 2025 through 2028;
- Mortgage origination volumes and net interest margin trends for regional banks as rate and deposit-cost dynamics evolve.
Frequently Asked Questions
What is a one-time close construction loan?
A one-time close construction loan combines construction financing and the permanent mortgage into a single loan and a single closing. It removes the need for a second closing after construction and can lower total closing costs for borrowers.
Who can benefit from one-time close loans?
First-time buyers, buyers building a custom home, and loan originators seeking new business opportunities can all benefit. Borrowers avoid additional closing costs and potential requalification at a later date; brokers gain earlier commission certainty.
Which loan programs are commonly available as one-time close?
Agency programs under FHA, VA, USDA and conventional rules are available in one-time close forms through some lenders. Program specifics—such as down payment requirements and construction payment schedules—vary by agency.
Do borrowers make payments during construction?
Payment requirements differ by program. Some FHA construction products may allow no payments during construction, while many conventional construction loans require interest-only payments during the build period.
What was the federal loan for the Montana renewable fuels project?
A guaranteed federal loan with a principal of $1.44 billion supports expansion of a sustainable aviation fuel and renewable diesel facility. An initial draw of roughly $782 million was released for eligible expenses, with remaining funds held in a delayed-draw construction facility for disbursement during project build-out through 2028.
How did the regional bank perform in the latest quarter?
Net income was $3.2 million in Q2 2025, assets were about $2.14 billion, deposits totaled $1.74 billion, and net interest margin improved to 3.91 percent. Mortgage originations and mortgage banking income rose, though the bank also recorded a $1.0 million provision for credit losses in the quarter.
Key features at a glance
| Topic | Key features |
|---|---|
| One-time close construction loans | Single closing for construction and permanent loan; available in FHA, VA, USDA, conventional formats; borrower payment options vary; reduces second-close refinancing risk; brokers paid at initial closing. |
| Montana renewable fuels project loan | $1.44 billion guaranteed loan plus $233 million capitalized interest; initial draw ~$782 million released; delayed draw for remaining funds through 2025-2028; expands SAF capacity to ~300M gallons/year; additional $150M equity investment planned. |
| Regional bank Q2 2025 highlights | Net income $3.2M; assets $2.14B; deposits $1.74B; NIM 3.91%; residential originations $78.6M; dividend $0.145 per share declared; $1.0M provision for credit losses recorded. |
Deeper Dive: News & Info About This Topic
Additional Resources
- FuelCellsWorks: Montana Renewables announces closing of $1.44 billion DOE loan facility
- Wikipedia: Sustainable aviation fuel
- GlobeNewswire: Eagle Bancorp Montana Q2 2025 results
- Google Search: Eagle Bancorp Montana Q2 2025 earnings
- GlobeNewswire: Q2 2025 supplemental resource (download)
- Google Scholar: DOE loan guarantee Montana renewable fuels
- The Electric GF: Sen. Daines — $1.44B federal loan to Calumet back on
- Encyclopedia Britannica: Calumet renewable fuels (search)
- REBusinessOnline: Gantry secures $10.5M loan for multifamily community in Montana
- Google News: Gantry multifamily loan Montana
Author: Construction NY News
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