From land and plans to a finished building.

A construction loan funds a build in stages rather than all at once, releasing money as work is completed and inspected. It is the most schedule-dependent lending there is, which makes preparation matter more than anything else.

What you are actually financing.

Construction lending covers land acquisition, the build itself, or both together. Funds are released against a draw schedule tied to completed stages — foundation, framing, mechanical, finish — with an inspection before each release. You pay interest only on what has been drawn.

Because the collateral does not fully exist yet, lenders underwrite the plan as closely as the borrower: the plans, the permits, the budget, the builder, and what happens to the loan when the building is finished.

Ground-up single family and small multifamily
Land acquisition plus construction
Major structural renovation and additions
Owner-builders, with the right lender
ADUs and second units

Permits before pricing

The most common reason a construction loan stalls is entitlement — plans not approved, permits not pulled, a jurisdiction moving slower than the schedule assumed. Know where you stand with the city before you build a loan timeline around it.

What lenders want to see.

Construction files are heavier than other loans. These are the pieces that carry the most weight.

The plans and permits

Approved plans, permit status, and the jurisdiction’s timeline. Where you are in that process often determines which lenders will even look.

The builder

Licensing, insurance, and track record. On most programs the general contractor is underwritten nearly as closely as the borrower.

The take-out

What replaces the construction loan at completion — a sale, or permanent financing. Some programs roll into permanent automatically; others require a separate refinance you should line up early.

Construction, or renovation?

The line is structural. Building from land, adding square footage, or changing the structure is construction lending, with permits, inspections, and a longer schedule. Renovating an existing structure — even substantially — is usually a fix and flip or rehab loan, which is faster to arrange and lighter to administer. If you are unsure which side of that line your project falls on, describe the work and we will tell you.

What we will ask you for

Approved plans and current permit status
Detailed construction budget and draw schedule
Builder’s license, insurance, and references
Land purchase contract, or existing deed if you own it
Your income documentation, or the project pro forma for investment builds
Exit plan — sale or permanent financing

Common questions.

Can I act as my own general contractor?

Some lenders permit owner-builders and many do not, and those that do usually want relevant experience. It narrows the field considerably. Tell us early if that is the plan so we do not waste time with lenders who will decline on that basis alone.

Do I make payments during construction?

Typically you pay interest only on the amount drawn to date, so payments start small and grow as the build progresses. Budget for those payments alongside the construction costs — they are real money during a period when the property is producing nothing.

What happens if the build goes over budget?

This is the risk that sinks projects. Lenders generally want a contingency built into the budget from the start, and a plan for who covers an overrun. Being honest about the number at the outset is far better than discovering the gap at the framing draw.

Does the loan convert to a normal mortgage?

Sometimes. Construction-to-permanent programs roll into a long-term loan at completion, which saves a second closing. Other programs require a separate refinance when the certificate of occupancy issues. Know which one you have before you break ground.

Can I finance an ADU?

Often, yes — and there are several routes depending on whether you are building on a property you already own and how much equity you have. It may be a construction loan, or it may be simpler to use a second mortgage or HELOC. We will compare them.

Tell us where the project stands.

Plans, permits, budget, and builder — even partial. The earlier we look, the more options you have.