Seeking Construction Loan advice

Grand Rapids, Michigan
Creative Real Estate Financing
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Seeking Construction Loan advice

Tori Rhodes
Member since 2022 · 4 posts · 3 votes

Hey everyone! I am seeking advice on how to get a construction loan. 

I am in the process of getting my Michigan Builders License and I currently own 4 small rental properties. I have never built a home before and I do not have 'construction' experience aside from renovating my own spaces (so i do have experience- just no formal experience). 

I have begun to look for a new primary for myself but have decided that if possible, I would like to build rather than buy. 


Is there any way to get a construction loan for a self build WITHOUT extensive building experience and references? 


Any assist here is so appreciated!

Thank you, 

Tori

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Ashley C.
International · Member since 2023 · 120 posts · 20 votes
1y

Hi Tori,

Let's connect and discuss outside! One of our company arms might be able to assist.

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  • Ashley C.
    International · Member since 2023 · 120 posts · 20 votes
    1y

    Hi Tori,

    Let's connect and discuss outside! One of our company arms might be able to assist.

    1Reply
  • Stanley Yeldell
    Member since 2025 · 116 posts · 52 votes
    1y

    Tori, great idea to build your own home! Getting a construction loan without formal building experience is possible, but lenders often require a licensed builder or contractor to oversee the project. Here are some strategies to secure financing:

    1. Owner-Builder Construction Loan (Challenging but Possible)

    Some lenders offer owner-builder loans, but they usually require:
    ✅ Strong financials (good credit, assets, low debt-to-income)
    ✅ A solid construction plan, budget, and timeline
    ✅ Proof of prior experience (renovations help, but formal experience is a plus)
    ✅ A licensed contractor or project manager to sign off on the build

    2. Hire a Licensed General Contractor (Best Path)

    Since you’re still getting your Michigan Builder’s License, you might have better luck partnering with a licensed contractor for loan approval. You can act as the project manager while the contractor oversees construction.

    3. Local Banks & Credit Unions

    Smaller banks and credit unions are more flexible than big lenders and might approve you with:
    ✔ A detailed project plan
    ✔ A licensed subcontractor network
    ✔ Proof of rental income history (since you own rentals)

    4. Private Money or Hard Money Lenders

    If traditional financing is a challenge, a private or hard money lender could fund the construction phase. Then, you could refinance into a conventional mortgage once the home is built.

    Would you like any recommendations for lenders open to working with owner-builders?

    0Reply
  • Jonathan KlemmBusiness Member
    Moderator
    Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes
    1y

    Hey @Tori Rhodes - As a builder myself here in Chicago that is a question I hear often.

    Before looking into your loan options, I'd look long and hard at the cost of land and construction in your Grand Rapids area.  I have often seen many people love the idea of building, but once they figure out the cost, those ideas change.

    For reference, here in Chicago, you can expect new builds to be between $200-$275/SF depending on MANY factors...that's just a very rough ballpark!

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