Construction Loans

A one-time-close (OTC) construction-to-permanent loan combines the construction loan and the permanent mortgage into a single closing. You sign once, pay one set of closing costs, and the loan automatically converts to your permanent mortgage when construction wraps. This is what we recommend in 90% of cases.

A two-time close means you take out a short-term construction loan first, then refinance into a permanent mortgage when the home is finished. It can offer more flexibility on permanent loan shopping, but it doubles your closing costs and re-exposes you to rate risk.

Construction loans don't release the full loan amount upfront. Instead, your builder submits draw requests at predetermined milestones — foundation, framing, roof dry-in, mechanicals, drywall, finishes, final. Each draw is verified by an inspector before funds are released.

During the construction phase, you only pay interest on the amount that's been drawn — not the full loan amount. That keeps your monthly carrying cost manageable while the home goes up.

Most construction loans require 10–20% equity in the project. If you already own the land, your land equity often counts toward your down payment — meaning a lot you bought five years ago can dramatically reduce the cash you need to bring to closing.

We order a 'subject to completion' appraisal that values the home as if it were already built, based on your plans and specs. The down payment is calculated against that future value.

If you're a licensed builder or have significant construction experience, owner-builder programs let you act as your own general contractor. The qualification bar is higher — we'll need to review your construction resume, project plan, and budget — but the cost savings can be substantial.

For most buyers who aren't full-time builders, we recommend hiring a licensed GC. The peace of mind is worth it.

Construction loans typically run 9–12 months. We build in milestone checkpoints with your builder so we know early if a project is going to need more time. Extensions are available for legitimate delays (weather, material shortages, permitting issues) — usually for a small fee.