Robert M. O'Toole, senior staff vice president of the Mortgage Bankers Association of America, could have used the new loan to be offered by First Advantage Mortgage Corp.

Mr. O'Toole said he recently built his dream house - and paid for two loan closings.

The Construction Perm loan, which will be available from Columbia, Md.-based First Advantage by the beginning of next year, will let homebuyers avoid a second closing. The new loan lumps a construction loan and home loan into one.

Many lenders such as First Advantage have tried to find market niches. But with the refinance boom expected to end soon, lenders are now seeking them out more aggressively.

The Construction Perm loan is certainly a niche product, "I look at it as a supplement," said Albert C. Kocourek, First Advantage president and CEO.

Larry M. Dew Jr., senior vice president of First Union Mortgage Corp., Charlotte, N.C., said variations on this loan have been offered before.

"I think it will be popular again because construction is in," Mr. Dew said.

Loan Is to Homebuyer

Normally, a builder will take out a construction loan at a rate floating over prime. After construction, buyers pay off builders' loans with a mortgage of their own. Closing fees are the responsibility of buyers. At First Advantage, a closing on a $200,000 home costs $1,500 to $2,500, Mr. Kocourek said.

Construction Perm loans eliminate one of the closings. Loans are made directly to the homebuyer and float above prime, with interest-only payments, until the building is finished.

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