Construction Loans
Construction Loan Benefits
Build Your Dream Home
Design and build a custom home that perfectly meets your needs and preferences instead of compromising with existing properties on the market.
One-Time Close Option
Some construction loans offer a single closing for both the construction phase and permanent mortgage, saving you time and closing costs.
Flexible Draw Schedule
Funds are disbursed in stages as construction progresses, meaning you only pay interest on the amount that has been drawn.
Construction-to-Permanent
Once construction is complete, your loan automatically converts to a traditional mortgage, streamlining your path to homeownership.
Professional Oversight
Lenders provide oversight and stage inspections to help keep your build on schedule and within budget.
Various Program Options
Choose from conventional, FHA, VA, and USDA construction loans depending on your needs and qualifications.
Construction Loan Eligibility
Credit Score
Most construction loans require a minimum credit score of 680 or higher, with lower rates available for scores above 740.
Down Payment
Typically 20–25% for conventional construction loans. Some government-backed options like VA and FHA may offer lower down payment requirements.
Debt-to-Income Ratio
Maximum DTI ratios typically range from 36–45%, with lenders focusing on your ability to handle potential cost overruns.
Builder Approval
Licensed, insured builders with a proven track record of quality construction are required. Most lenders will need to approve your builder.
Plans & Specifications
Detailed architectural plans, specifications, and a construction contract with a fixed price and build timeline are needed for approval.
Reserves & Contingency
Cash reserves for potential cost overruns (typically 10–15% contingency) and several months of housing payments are usually required.
Construction Loan Process
Pre-Approval
Determine your construction budget by understanding different loan programs and maximum loan amounts.
Land Purchase
If you don’t already own land, your construction loan can include funds for the lot purchase. Some borrowers secure the land first with a separate loan.
Builder Selection & Plans
Choose a qualified builder, finalize architectural plans, and obtain detailed cost breakdowns and construction timelines for lender review.
Appraisal & Approval
An appraisal will determine the completed value based on your plans and specifications. The lender will review your complete application for approval.
Loan Closing
Once approved, you’ll close on your construction loan. If you’re purchasing land simultaneously, those funds will be disbursed at closing.
Construction Phase
Construction begins with periodic inspections and draw disbursements as work progresses. Interest is typically only charged on funds that have been disbursed.
E Mortgage Capital, Inc. is a full-service mortgage company that offers extensive options for residential mortgages, with quick service and leading rates
E Mortgage Capital. Inc.
NMLS#: 1396861
915 Highland Pointe Dr, Roseville, CA 95678, USA
3401 Mallory Ln, Franklin, TN 37067, USA
18071 Fitch, Irvine, CA 92614, USA
Notice To Texas Loan Applicants: Consumers wishing to file a complaint against a mortgage banker, or a licensed mortgage banker residential mortgage loan originator, should complete and send a complaint form to the Texas Department of Savings and Mortgage Lending, 2601 North Lamar, Suite 201, Austin, TX 78705. Complaint forms and instructions may be obtained from the department’s website at www.sml.texas.gov.
A toll-free consumer hotline is available at 1-877-276-5550. The department maintains a recovery fund to make payments of certain actual out of pocket damages sustained by borrowers caused by acts of licensed mortgage banker residential mortgage loan originators. A written application for reimbursement from the recovery fund must be filed with and investigated by the department prior to the payment of a claim. For more information about the recovery fund, please consult the department’s website at