Loan Programs  |  12

Construction Loans

Build it your way. Finance it in one move.

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The quick version

How it works

A construction loan pays for building a new home from the ground up, then turns into a regular mortgage once the house is finished. The most popular version is the one-time close, or construction-to-permanent loan: one application, one closing, one set of closing costs. During the build, your builder is paid in stages, called draws, as work is inspected and completed, and you typically pay only interest on the money drawn so far. When the home is done, the loan converts to your permanent mortgage. If you already own the lot, its equity can often count toward your down payment. We'll also compare conventional, FHA, and VA construction options so you get the right fit, not just the first one offered.

Highlights

One closing, start to finish

Construction and permanent financing in a single loan.

Pay as the build progresses

Builder draws are released as work is completed.

Land equity can count

A lot you own can help cover your down payment.

Conventional, FHA & VA options

Several construction programs, compared side by side.

FAQ

Questions people actually ask

Tap a question to see the answer.

1How does a construction loan work?+
The lender approves your plans, budget, and builder up front. During construction, money is released to the builder in draws after each stage is inspected. Once the home is complete, the loan converts to a standard mortgage.
2What's the difference between a one-time and two-time close?+
A one-time close combines the construction loan and the permanent mortgage, so you close once. A two-time close uses a short-term construction loan, then a separate mortgage when the home is done, which means two closings and two sets of costs.
3Can I use land I already own?+
Often, yes. Equity in a lot you own can usually count toward your down payment, depending on the program and how long you've owned it.
4Do I make payments while the house is being built?+
Usually you pay interest only on the amount drawn so far, so payments start small and grow as the build progresses. Some programs handle this differently, and we'll walk you through the schedule.
5Does my builder need to be approved?+
Yes. Lenders review the builder's experience, insurance, and track record before approving the loan. If you already have a builder in mind, we'll get them reviewed early.
6What happens if the build goes over budget?+
Most budgets include a contingency reserve for surprises. Costs beyond that are usually yours to cover, so it pays to plan a cushion and lock down your selections early.
7Can I use an FHA or VA loan to build a home?+
Yes. Some lenders offer FHA and VA one-time close construction programs, which can mean a lower down payment for eligible buyers.
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This information is general and educational. It is not a commitment to lend. Program guidelines vary by lender, change over time, and are subject to credit approval and underwriting.

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Plano Mortgage Broker

Mohave Mortgage

5830 Granite Pkwy # 100-213

Plano Texas, 75024

Office: (469) 414-5554

Branch NMLS # 2690682

Mohave Mortgage

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