Construction Financing Apr 2026

: Funds are released to your builder as they complete milestones, such as laying the foundation or finishing the framing. Lenders often require an inspection before releasing the next draw.

: Once closed, construction begins and the lender starts the draw-and-inspection cycle.

Construction financing is a short-term, high-interest funding method used to cover the costs of building a new home or commercial property from the ground up. Unlike a traditional mortgage, which provides a lump sum to buy an existing home, construction loans are disbursed in stages—known as "draws"—as specific building milestones are reached. Core Concepts of Construction Loans construction financing

: Only available if the borrower is also a licensed professional builder who will act as the general contractor. Eligibility & Requirements

: Most lenders require a score of at least 680 , though some may accept 620. : Funds are released to your builder as

: Lenders will vet your contractor's experience and insurance.

: This includes your building plans, materials list, and project timeline. Eligibility & Requirements : Most lenders require a

: These loans typically last 12 to 18 months , covering only the building phase.