where to find a construction loan

12 Replies

Using this time indoors, i started putting together a plan to finally build a SFH in a piece of land I own.
I know construction loans are not that common or easy to find.
Does any in BP have any experience with them? It would be great to talk with someone about it.
has anybody use a crowdfunding platform for it?

@Carlos Pelegrina I have used a construction to permanent loan twice. Once in California in 2007 and the other time in Virginia in 2017. Both times they were local banks. Both times I called around 25 banks and only 2-3 of them offered these types of loans. This will be easier if this is for your own home. If it is an investment property they may make you take out a loan as a commercial investment. As I mentioned a construction to permanent loan is the way to go. There is only one closing cost. Once you are done building the bank will automatically transfer it to a regular loan per the terms that were agreed. The construction part is usually good for a year and will be at a higher interest rate. Most banks will have a draw schedule that they will want your GC to adhere to for the draw schedule. I suggest you start calling around. Good luck.

@Carlos Pelegrina I found my excel sheet with all the banks in my area (DMV metro area) that offered construction to permanent loans. They all offered different terms and almost all of them required using a General Contractor. They didn't like Owner Builders as they viewed that as too much risk. The majority of them were 80% LTV but a few did offer 90% LTV. I'm not sure if any of these lend in your area you can check.

BB & T, Main Street Bank, McClean Mortgage, United Bank, Union Mortgage, John Marshall (no GC required but to permanent required a new loan), Eagle Bank (they did not budge on any request as they are a big bank and go by what their computer tells them), Citizen Bank.

thank you @Eric Teran great info. I will check with them. I work also as an architect in the NY area. Trying to include real estate as part of what I can offer to clients, and working in some cool ideas for what I will need this financing.

@Carlos Pelegrina you have done some very nice looking work. It also, looks like you have done some prefab designs? Have any of them been built? My house, that I built in Alexandria is prefab. It was amazing! It took me a few tries to understand how to design for a prefab structure but it makes sense. I think as Architect's a lot of lack this knowledge which is why it isn't done more. I also wish more people would be accepting of this method as I think it has much more to offer than any negative aspects. I will PM you and send you my website where I have a blog on the construction process. BP doesn't like it when I give out my website but I think it will be beneficial to you if you are going to build prefab.