Construction Loans
Financing to build your home from the ground up.
Financing to Build Your Home From the Ground Up
Not every dream home is already built. If you're planning to build on your own lot or work with a custom builder, a Construction Loan from Louisa Mortgage gives you the flexible financing you need — from breaking ground to move-in day.
Check Your Eligibility →What Is a Construction Loan?
A Construction Loan is a short-term loan that covers the cost of building a home, released in stages as construction progresses rather than in one lump sum. Once the home is complete, the loan is typically converted into a standard long-term mortgage — a process known as a construction-to-permanent loan.
Types of Construction Loans We Offer
Construction-to-Permanent Loan
One loan, one closing. Covers the building phase and automatically converts into a permanent mortgage once construction is complete — saving time and closing costs.
Stand-Alone Construction Loan
A short-term loan that covers only the construction phase. Once finished, you'll apply separately for a permanent mortgage to pay off the construction loan.
Renovation Construction Loan
For buyers or homeowners looking to finance major renovations or additions, combining purchase or refinance costs with renovation funds into a single loan.
Why Choose a Construction Loan with Louisa Mortgage?
One Closing, Less Hassle
Construction-to-permanent loans mean you close once, not twice.
Interest-Only Payments During Construction
Pay interest only on funds drawn so far, keeping costs manageable while building.
Flexible Draw Schedules
Funds are released in stages tied to construction milestones, keeping your project on track.
Lock Your Rate Early
Depending on the program, you may be able to lock in your permanent mortgage rate early.
Build on Your Terms
Use your own builder, choose your own floor plan, and customize your home exactly the way you want it.
How the Construction Loan Process Works
- Get Pre-Approved: We'll review your finances, land details, and builder information to determine your construction loan amount.
- Finalize Your Plans & Builder Contract: Lock in your building plans, cost estimates, and a licensed, approved builder.
- Close on Your Construction Loan: Sign your loan documents before construction begins.
- Draw Schedule Begins: Funds are released in stages as construction milestones are completed and inspected.
- Construction Completion: A final inspection confirms the home is complete and ready for occupancy.
- Convert to a Permanent Mortgage: For construction-to-permanent loans, your loan automatically converts into a standard long-term mortgage.
Am I Eligible for a Construction Loan?
Construction loan requirements are typically stricter than standard mortgages, since lenders are financing a project rather than an existing asset. Generally, you'll need:
- Credit & Finances: A good to strong credit score, plus sufficient income and reserves to cover the build period.
- Project Plans: A detailed construction plan, budget, and timeline.
- Builder: A licensed, approved builder or general contractor.
- Down Payment: A larger down payment than a traditional mortgage, often 10–20%.
Construction Loan FAQs
A construction-to-permanent loan automatically converts to a regular mortgage after the build is complete, requiring only one closing. A stand-alone construction loan covers only the building phase, and you'll need a separate loan to pay it off once construction is finished.
Funds are released in draws, tied to specific construction milestones (such as foundation, framing, and finishing), and typically require an inspection before each draw is released.
Most construction loans require interest-only payments during the build phase, based only on the funds drawn so far — not the full loan amount.
Yes, as long as your builder is licensed and approved by the lender. We'll walk you through the approval requirements.
Down payment requirements are generally higher than standard mortgages, often ranging from 10–20%, depending on the loan program and your financial profile.
Ready to Start Building?
From your first blueprint to your final walkthrough, Louisa Mortgage is here to help finance every stage of your build.
This content is for informational purposes only and does not constitute a loan offer or guarantee of approval. Rates, terms, and eligibility are subject to change and lender review.