It is possible to obtain a stand alone construction loan, but a second loan would have to be initiated once the home was completed. The advantage of a "construction to perm" loan is that it is two loans in one. Initially, it is used to finance the construction of the new home, and once it is completed, it converts into a permanent mortgage - with only one closing. During the build process, only interest needs to be paid and your builder receives regular payments from the bank. Land may be included in the loan, and it may be used for primary or secondary residence up to $2 million.