New Home Construction Loans

What is a new home construction loan?

A home construction loan isn’t the same as a mortgage—it’s a short-term loan that only covers the building cost of a new home and is considered specialized financing. After the home is built, the occupant applies for a home  mortgage to pay for the completed home.

When it comes to home construction, there are various options available, ranging from new construction to a complete remodel. Whether you're starting at ground zero and need a construction loan or remodeling a property and need a renovation loan, there's a financing option that's appropriate for you.

Construction-to-permanent financing

Our one-time close (OTC) home loan option is designed to help you borrow just what you need to build the home of your dreams.


One-time close loan

For new construction or a major remodel of a primary or secondary residence, a one-time close (OTC) loan offers an all-in-one financing experience. An OTC loan provides financing for the lot purchase and building construction  process, then automatically converts to one permanent loan. Required payments during the construction period are interest payments only, and there is one set of closing costs and documents, which can help save money.


  • There’s only one set of closing costs.
  • The loan covers both the construction and the permanent loan.
  • Available on stick-built.
  • You can make interest-only payments during construction.


  • If you go over budget, you might need a second loan.


Owner-builder financing

When you build a house, you usually have a general contractor in charge of the entire project. They ensure that the framing, tile, flooring crew, and the painters, all work together to construct your home on time and within budget. If you’re acting as the general contractor for your home, you may be able to secure an owner-builder loan.


End loan

An end loan is a standard mortgage loan that a homebuyer or builder (who will own the home) can secure for a completed home. If your home's construction phase is finished, you could submit a mortgage application for this loan type.


Frequently asked questions:

Does the Federal Housing Administration (FHA) offer new home construction loans?

An FHA One-Time Close (OTC) loan is an available financing option for new construction. If you’re looking to renovate an existing home, a 203(k) rehabilitation loan may be a good fit.

Can you use a VA construction loan to build a house?

Qualified veterans can use OTC VA construction loans for land acquisition, the cost of building a home, and permanent financing with a no down payment option.

Does USDA offer construction loans?

Yes, the USDA offers an OTC construction loan that ends with a fixed-rate mortgage and allows for a no down payment option.

Interested in this loan?