Construction — Financing

: Only available if the borrower is also a licensed professional builder who will act as the general contractor. Eligibility & Requirements

: Once closed, construction begins and the lender starts the draw-and-inspection cycle.

: This includes your building plans, materials list, and project timeline. construction financing

: Lenders will vet your contractor's experience and insurance.

: Expect to put down 20% to 25% . Government-backed options like FHA construction loans may allow as little as 3.5% down. : Only available if the borrower is also

: Determine your budget before paying for architectural plans.

Construction financing is a short-term, high-interest funding method used to cover the costs of building a new home or commercial property from the ground up. Unlike a traditional mortgage, which provides a lump sum to buy an existing home, construction loans are disbursed in stages—known as "draws"—as specific building milestones are reached. Core Concepts of Construction Loans : Lenders will vet your contractor's experience and

: These loans typically last 12 to 18 months , covering only the building phase.