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For Lenders & Loan Officers · Construction loans

Construction & construction-to-perm — what we need, and what we don’t

We don’t ask for your borrower’s appraisal, and we rarely need the loan application. Two questions decide the file: does your investor require ALTA 32/33, and has any work started on the lot?

Published September 2026 · 2 min read

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Answer both questions when you open the order and the file goes on one of two tracks. Either way, your final policy issues without the mechanic’s lien exception once the build is complete.

Why it matters. In Colorado a mechanic’s lien takes its priority from the day work first started, not the day it’s recorded. A lien filed months after closing can step ahead of your deed of trust — so insuring against it mid-build means the underwriter approves each file on its own.

The two tracks

  • StandardLoans you keep on your books, no work started before we record. The mechanic’s lien exception stays on during the build; at completion we clear it with a certificate of occupancy, notarized builder’s and owner’s affidavits, and an ILC.
  • Lien coverage — ALTA 32/33Your investor requires coverage during the build, or work has started before we record. The underwriter looks at the builder, not the borrower: budget, proof of payment, lien waivers, and builder and owner financials.

What we’ll ask for, side by side

ItemStandardLien coverage (ALTA 32/33)
Loan application or appraisalNot neededNo appraisal; loan application rarely
During constructionNothingBudget, lien waivers, proof of payment, financials
At completionCertificate of occupancy, affidavits, ILCCertificate of occupancy, affidavits, ILC
Title underwriter approvalUsually notRequired, file by file

Three things to know

  • ALTA 32/33 is investor-driven. Loans you keep rarely need it; loans you sell or participate out often do. Only your investor can answer — no title company can.
  • What it buys. ALTA 32 covers your loan against liens as the build proceeds; ALTA 33 is the date-down we issue per draw — you estimate the count, we bill at closing. Expect a premium and review time.
  • “Work started” means any work. Clearing, grading, a well, a driveway, materials on the lot. Any of it before we record moves the file to the lien-coverage list. Ask the borrower, then tell us.

Common questions

Do you need the borrower’s loan application or appraisal?

Not the appraisal — you set the loan amount, we insure it. The loan application only rarely, and only if the underwriter asks on a lien-coverage file.

What are ALTA 32 and ALTA 33?

ALTA 32 insures your construction loan against mechanic’s liens as the build proceeds. ALTA 33 is the date-down endorsement issued for each draw, extending coverage to the funds you’ve advanced.

What if work already started on the lot before closing?

Tell us with the order. In Colorado a lien’s priority runs from the first work on the project, so anything done before your deed of trust records can put liens ahead of your loan. The file moves to the lien-coverage list even if your investor didn’t ask for ALTA 32/33.

What happens at completion on a standard file?

You send us the certificate of occupancy, the notarized builder’s and owner’s affidavits, and an ILC. We clear the mechanic’s lien exception and your final policy issues without it.

Educational only — not legal advice. Mechanic’s lien and ALTA 32/33 requirements are set by the underwriter (First American or Westcor) per file and may change. As of September 2026.