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 Your Expert Guide To 

Construction Loan Programs

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What is a construction loan program?

Construction and builder home loan programs offer specialized financing options tailored to individuals looking to build their dream home from the ground up, providing the necessary funds and flexibility to manage the construction process.

What we talk about in this guide:

Construction Programs

Click on each loan program to view additional details, requirements, and key benefits.

Home Inspection
Construction to Perm - Conventional, FHA, VA, JUMBO

When building a home you'll need a construction-to-permanent loan. This means you can build a home and finance your mortgage using one lender and one mortgage. It streamlines the home-building process from buying the land to completing construction.

At Churchill Mortgage, we offer one-time close home construction loans with several loan programs as well as a two-time jumbo construction loan option.

Home Construction Loan Options Chart

Home Inspection
Land / Lots Loan Program

Land / Lots loan programs help buyers finance the purchase of a lot of land. This is commonly used for individuals and businesses to purchase land to build upon. 

Due to unique circumstances, there are some unique qualifications for buyers to utilize this program.

  • 12 Month Loan term
  • Buyer must be pre-qualified for lot loan as well as future construction to permanent loans
  • Borrowers must have signed and delivered Statement of Intent to the lender to obtain construction-to-permanent financing within one year of the lot-loan closing.
  • Land Survey Must be completed before closing
  • Soil and Percolation test may be required.

Primary Home

  • $350,000 Max Loan Balance
  • Min FICO: 700
  • DTI: 40% or DU
  • Reserve Requirements: 6 Months PITI

Second Home

  • $350,000 Max Loan Balance
  • Min FICO: 720
  • DTI: 40% or DU
  • Reserve Requirements: 12 Months PITI
Home Inspection
Renovation Loan Program
Unlike Construction-to-Perm programs, Renovation Loan Program starts with an existing property and adds to it.
  • Borrowers can use the completed value of the home for LTV (is property already owned), otherwize, the full purchase price will be used.
  • No Interest-Only period, PITI starts right away.
  • Borrowers can finance up to 6 months of PITI if they are unable to live in home during the build.
  • Funds advanced at close, and held in Renovation account for draws.

Renovation Details

  • Single Close
  • Conforming Loan Limit
  • Primary, Second home & Investment Options
  • LTV upto 90%

Pro's and Con's of Construction Programs


Customizable Homes: Construction loans allow borrowers to build their dream home to their exact specifications, ensuring every detail meets their personal preferences and needs.

Flexible Payment Terms: These loans often come with flexible payment schedules tailored to the construction timeline, making it easier to manage finances during the building process.

Interest-Only Payments During Construction: Many construction loans offer interest-only payments during the building phase, which can help keep initial costs lower until the home is completed.

One-Time Closing Options: Some construction loans offer a one-time closing option, which means you only have to go through the closing process once for both the construction and permanent financing, saving time and money.

Potential for Increased Home Value: Building a new home can lead to higher property value compared to purchasing an existing home, as new homes often incorporate modern design, technology, and energy efficiency.


Higher Interest Rates: Construction loans typically come with higher interest rates compared to traditional mortgages, reflecting the increased risk lenders take on during the construction phase.

Complex Approval Process: Obtaining a construction loan can be more complicated and time-consuming than a standard mortgage, requiring detailed plans, budgets, and construction timelines.

Variable Costs: Construction projects are susceptible to unforeseen expenses and delays, which can lead to cost overruns and potentially increase the overall loan amount.

Higher Down Payment Requirements: Construction loans often require a larger down payment, sometimes as high as 20-30%, making it more difficult for some borrowers to qualify.

Risk of Incomplete Projects: There is always a risk that the construction project may not be completed as planned due to various factors such as contractor issues, weather delays, or financial constraints, which can leave borrowers with unfinished homes and financial burdens.

★ ★ ★ ★ ★

Churchill Mortgage was the perfect person to help me buy my first house. He was able to answer all my questions about Oregon Bond, construction loans, and self employment taxes, which was a tough combo to find in a lender.

Stacy M.
Bend, OR
★ ★ ★ ★ ★

Doug has been my rock since this process began. He was always available to answer my questions and explained things further when I didn't understand. He made the construction loan experience seem less complicated and I really appreciate all the time and effort I feel he has given to me.

Celeste B
Pensacola, FL



Frequently Asked Questions about Construction Loan Programs

Navigating the world of mortgages and home loan programs can feel overwhelming, but understanding the basics can make the process much smoother. To help you on your journey to homeownership, we've compiled a list of frequently asked questions about mortgages and home loan programs.

Whether you're a first-time homebuyer or looking to refinance, these questions and answers are designed to provide you with the knowledge and confidence to make informed decisions about your home financing options.

What is a construction home loan?

A construction home loan is a short-term loan used to finance the building of a new home or major renovation project. Unlike traditional mortgages, which provide a lump sum upfront, construction loans disburse funds in stages as the project progresses.

Once the construction is complete, the loan typically converts to a standard mortgage.

How do construction loan disbursements work?

Construction loan disbursements are made in stages, called "draws," based on the progress of the construction project. Common milestones for draws include the completion of the foundation, framing, roofing, and interior finishes. Each draw requires an inspection to verify that the specified work has been completed before funds are released.

What are the requirements to qualify for a construction home loan?

To qualify for a construction home loan, borrowers generally need a detailed construction plan and budget, a reputable licensed builder, and a substantial down payment (typically 20-30%). Lenders also require proof of income and assets to ensure the borrower can afford the loan and cover potential cost overruns.

What happens if construction costs exceed the loan amount?

If construction costs exceed the loan amount, the borrower is responsible for covering the additional expenses. This can be managed by having a contingency fund set aside before starting the project. It's crucial to work with a reliable builder and have a well-detailed contract to minimize the risk of cost overruns.

Additionally, some lenders offer options to increase the loan amount if necessary, though this may require additional approval and qualifications.


Other restrictions or limitations may apply. Not all applicants will qualify. Not a commitment to lend. Terms and conditions can change without notice.

We strive to provide comprehensive information about our home loan programs; however, it is important for users to understand that not all programs are available at all times or in all locations. Each loan program may have specific prerequisites or requirements that must be met in order to qualify or become eligible.

While we make every effort to ensure the accuracy and currency of the information on our website, we cannot guarantee that a particular loan program will be available when you apply. Additionally, meeting the listed criteria does not guarantee qualification for any program.

Please note that availability and eligibility for our home loan programs are subject to change without notice. We recommend contacting us directly to verify the current status and specific requirements of any program you are interested in before making any decisions based on the information provided on our website. Our team is here to help you navigate your options and find the best loan program to meet your needs.

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