New Home Construction Financing

Construction cooled down after the real-estate bubble popped in 2008, but the industry can feel it starting to warm.

In 2005, at the height of the housing boom in the South, construction began on more than 1.8 million homes in the region, according the U.S. Census Bureau. New builds then bottomed out in 2009 to a little more than a half million, the lowest it had been in 50 years.

During the past six years, though, the number of new residential construction has pushed upward to more than 840,000.

While the increase is a beacon for optimism, there are still limited outlets for people who want to get a construction loan, or what is known in the industry as construction-to-permanent financing. One of the plethora of reasons why many lenders are not offering this is because there is too much risk to loan money for a home that is not yet finished.

We, however, offer construction financing with the FHA, VA and conventional loan programs.

If you have owned a lot for more than six months (financed or owned free and clear), then its appraised value can be used toward the down payment and closing costs on your construction loan. If it hasn’t been six months yet, then any money used as a down payment to acquire the land, as well as any improvements to it, may be used as cash equity toward the down payment and closing costs.

A lot can also be gifted from a family member, and its entire value may be used to satisfy the down payment and closing costs.

This is helpful for someone who might not have enough for a down payment or wants to keep more liquid cash in his or her accounts.

There can be a lot of nuances to these programs, so call 813-707-6200 if you have any question about FHA, VA or conventional loans, or new-home construction financing. We’ll be glad to help.