Construction Loan
Construction loans provide short-term financing for building a new home, with funds disbursed in stages as construction progresses. Many programs convert to a permanent mortgage at completion.
Min. Down Payment
Typically 10-20% depending on program
Credit Guidance
Generally 620-680+ depending on loan type and program
Income / DTI
Full income documentation required
Occupancy
Primary residence or second home
Property Types
Construction loans provide the financing needed to build a new home from the ground up. Rather than disbursing a lump sum at closing like a traditional purchase mortgage, construction loans release funds in stages — called draws — as construction milestones are reached and inspected. Most construction loans are structured as construction-to-permanent products (also called one-time close loans). This means a single loan application and closing covers both the construction phase and the long-term permanent mortgage. When construction is complete, the loan automatically converts without requiring a second closing — saving time and closing costs. During the construction phase, borrowers typically make interest-only payments on the drawn balance. Once the home is complete and the loan converts, regular principal and interest payments begin. Construction lending involves more complexity than a standard purchase: builder qualification, project plans, draw schedules, and inspections are all part of the process. Timelines can shift and costs can exceed initial estimates, so careful planning and a realistic budget are important. If you are exploring building a home in Utah and want to understand your financing options, we are glad to walk through the process and what you would need to get started.
Key Benefits
- Funds the construction phase of a new home build
- One-time close (construction-to-permanent) programs avoid a second set of closing costs
- Flexible options for custom builds, semi-custom, and some production builds
- Converts to a permanent mortgage at completion, providing long-term financing in one process
Considerations
- More complex underwriting than a standard purchase — builder approval and project plans required
- Draw schedule and inspections are required throughout construction
- Construction timelines and cost overruns can create complications
- Interest-only payments typically apply during the construction phase
- Not all builders are accepted by all lenders
Frequently Asked Questions
Have questions about Construction Loan?
Mia can help you understand if this program fits your situation — ask her anything about eligibility, timing, or how to get started.
Ask MiaWork Hard Mortgage · NMLS #2396714 · Equal Housing Opportunity · Licensed in Utah. Program availability and guidelines may change. Final eligibility depends on credit, income, assets, property type, occupancy, and underwriting approval.