We are building a home that is intended to be our primary residence in Morrison Colorado. I am currently working with a local bank that has a jumbo construction loan product, they do not go above 43% DTI, the bank has said the max loan amount is $900k. Our build budget (with contingency built in) is $1,100,000 (this includes $200k to pay off land). We have already received an appraisal on the home that came in at $1,700,000 ($1,625,000 with unfinished basement). We are planning on breaking ground in about 3 weeks once permits are issued, they are currently in the building safety phase. We have hired a fixed contract builder that has incentives to finish early and penalties if they finish late, we expect the build to last 9 months.

We purchased the land in April of 2022 for $270k and put $70k down on the property. We believe the land is worth $315k today. We currently live in DTC, we owe $215k on our townhouse and will be selling it when we are complete. If we were to list it today we would list for $375k. In all we have about $275K in equity between both properties that you would place a lien on.

Our exit strategy is to purchase the home ourselves when it is complete. We would get a traditional mortgage on the property, which will be fine because traditional jumbo loans can go to 50% DTI. We have already received pre-qualification letter to purchase this home. If for any reason that does not work we will sell the property and expect to get near $1.7MM for the home. I can send you a few comps as well, appraisal says $1.7, comparables indicate closer to $1.9MM.

2 options that we are looking at-

1- A loan of $150k-$200k to cover the difference of budget vs bank loan
2- A loan of $1.1MM which would cover the entire build