Most borrowers feel unsure how construction financing works, when funds are released, and what lenders require at each stage — but you deserve clear, simple guidance without the confusion.
Get the home financing clarity you deserve – simple, fast, and stress-free.
Takes about 60 seconds.
Construction Home Loan Explained
A Construction Loan is a short-term loan used to finance the building of a new home or major renovation. Instead of receiving the full loan amount upfront, funds are released in stages as construction progresses.
You can check your loan options in under 60 seconds — fast, secure, and no credit impact.
How Construction Loans Work
Construction loans are typically interest-only during the build. As each phase of construction is completed, the lender releases funds (called “draws”) to the builder. Once the home is finished, the loan converts to a permanent mortgage or is refinanced.
Who Construction Loans Are For
- Borrowers building a custom home
- Homeowners doing major renovations
- Buyers tearing down and rebuilding
- Investors building new properties
- Borrowers wanting full control over design and features
What Lenders Look At
- Construction plans and blueprints
- Builder credentials and licensing
- Project timeline
- Cost breakdown and budget
- Appraisal based on completed value
- Credit score and down payment
Basic Requirements
- 680+ credit score (varies by lender)
- 5%–20% down payment
- Approved builder
- Detailed construction budget
- Appraisal based on “as-completed” value
- Reserves for cost overruns
Loan Structure
- Interest-only during construction
- Funds released in draws
- Inspections required before each draw
- Converts to a permanent loan or refinances after completion
- Short-term loan (usually 6–18 months)
Types of Construction Loans
- Construction-to-Permanent (One-Time Close)
- Construction-Only (Two-Time Close)
- Renovation Construction Loans
- Owner-Builder Loans (limited availability)
Property Types Allowed
- Single-family homes
- Custom homes
- Major renovations
- Tear-down and rebuild projects
- Some lenders allow 2–4 unit builds
Benefits
- Full control over design and build
- Interest-only during construction
- Converts to a long-term mortgage
- Ideal for custom homes and major renovations
- Flexible loan structures
Next Steps
If you’re planning to build or renovate a home, a Construction Loan may be the best option. Finalize your plans, choose a licensed builder, and review your construction budget before applying.
Ready to see your loan options? Start below — fast, secure, no credit impact, and takes under 60 seconds.
No credit pull. No obligations. Just real numbers.