Construction Loans

Construction Loans

Overview

Construction loans are specialized financing vehicles intended for building a new home or undertaking major renovation projects. These loans can later convert (in some cases) to a standard mortgage once construction is complete, or they can require a separate “end loan” refinance.

Why an Construction Loans

Construction Loans provide funding for building new homes or major renovations. These short-term loans cover the cost of construction, with funds released in stages as the project progresses. They are ideal for buyers looking to construct a property from the ground up, requiring detailed plans and builder qualifications for approval.

For building projects
Covers land and construction costs
Down payment typically 20% to 30% for Investors and only 5% for Primary Residence
Interest-only payments during construction
Terms of 12 months, 18 months, and 24 months available

Danielle Damianov

NMLS#883539

Branch Manager

888-522-4149A
[email protected]

Who Qualifies?

Borrowers looking to build a custom home, hire a contractor, or oversee large-scale remodeling projects.
Individuals or families with detailed construction plans, a qualified builder, and a structured timeline and budget.
Often requires good credit and a solid financial profile, as lenders see new construction as higher risk.

Key Advantages

Draw Schedule: Funds are released in stages (draws) based on project milestones, helping ensure the construction stays on budget and schedule.
Interest-Only Payments: During construction, borrowers often only pay interest on the loan amount already disbursed.
One-Time or Two-Time Close Options: Some construction loans can convert into a permanent mortgage, simplifying the financing process.

Holly Niemeier

NMLS#1223276

Branch Manager

Schedule a Phone Call With Me

+1720.446.6340

[email protected]

Apply Now

Example:

A family wants to build their dream home on a piece of land they own. They secure a construction loan that releases funds in stages—foundation, framing, mechanicals, finishing—to pay the builder as the work is completed. After final inspection, the loan transitions into a standard 30-year mortgage.