Building a home from the ground up, or adding a substantial addition or ADU, requires a different kind of financing than a standard purchase. Construction loans fund the building process itself, typically disbursed in draws as work is completed, before converting into permanent financing once the project wraps.
Whether you're building a custom home on a lot you already own, or adding an ADU to generate rental income, the right construction loan structure matters as much as the build itself.
Key Benefits
One-Time Close Options
Combine construction financing and the permanent mortgage into a single closing, avoiding a second round of costs.
Two-Time Close Flexibility
Separate construction and permanent financing for borrowers who want more flexibility on the final loan structure.
ADU-Specific Financing
Options tailored to building an Accessory Dwelling Unit on an existing property.
Draw-Based Disbursement
Funds are released in stages as construction milestones are completed.
Eligibility at a Glance
- Detailed construction plans, budget, and a licensed builder are generally required.
- Down payment requirements are typically higher than for a standard home purchase.
- Lot ownership or purchase is factored into the overall loan structure.
- Property is typically inspected at each draw stage before funds are released.
- All terms subject to qualification and lender-specific guidelines.
How It Works
A Quick Conversation
We'll talk through your goals, income, and timeline to see how a construction loan fits your plans.
Pre-Approval
Once we've gathered your documents, you'll get a clear picture of what you can qualify for — so you can shop with confidence.
From Offer to Closing
I'll guide you through underwriting, appraisal, and closing, keeping you informed at every step.
Frequently Asked Questions
What's the difference between one-time close and two-time close?
A one-time close combines construction and permanent financing into a single loan and closing. A two-time close uses separate loans for each phase, which can offer more flexibility but means closing twice.
Can I use a construction loan to build an ADU?
In many cases, yes — there are financing options specifically structured around ADU construction on a property you already own.
Do I need my own builder already lined up?
Generally yes — most construction loans require a licensed builder and detailed plans as part of the application.
How does the down payment work on a construction loan?
Down payment requirements vary by program and whether you already own the land, but they're generally higher than for a standard purchase loan given the added risk of construction.
What happens if construction costs go over budget?
Most construction loans include a contingency reserve for cost overruns, but significant budget changes may require additional funds or a change order review before disbursement continues.