Construction Loans for Building Your Dream Home

Whether you’re starting from the ground up or planning a major custom build, a Construction Loan gives you the financing flexibility to turn your vision into reality. Unlike traditional home loans, construction financing is tailored to support the unique stages and costs of the building process—while still offering competitive terms and lending support from the JD.Mortgage team.

Explore your construction loan options today with guidance from a mortgage team that understands the complexity of new builds.

What Is a Construction Loan?

A construction loan is a short-term loan that finances the cost of building a home. These loans are disbursed in stages—called “draws”—as your builder completes different phases of construction. You’ll typically only pay interest during the building period, and once the home is finished, the loan is converted into a permanent mortgage or paid off in full.

If you’re unsure whether to build or buy, compare your options here with our purchase loan guide.

How Construction Loans Work

Construction loans differ from conventional purchase loans in a few key ways. Here’s what you can expect:

• Draw Schedule: Funds are released incrementally as construction progresses.
• Interest-Only Payments: Pay interest only during the construction phase.
• One-Time Close Options: Some programs roll construction and permanent financing into one loan.
• Custom Project Support: Financing tailored to your land, contractor, and architectural plans.

Want to see if a one-time close loan fits your needs? Let’s take a closer look together.

Who Can Benefit from a Construction Loan?

Construction loans aren’t just for high-end custom homes. They’re ideal for:

• Buyers who want to build a new home instead of buying an existing one
• Borrowers who already own land and want to build on it
• Those who need to tear down and rebuild a property
• Homeowners planning major additions or renovations

Have land already? Or need help finding a builder? Connect with our team to explore next steps.

Construction Loan Requirements

Compared to traditional mortgages, construction loans typically have more documentation and qualification requirements. Here’s what lenders usually look for:

• Solid credit and financial profile (though flexible options exist)
• Builder contracts, plans, and permits
• Detailed budget and draw schedule
• Down payment (ranges vary, but some programs allow low down options)

We even offer Non-QM construction loan solutions for self-employed or unconventional borrowers.

What Makes Construction Financing Different?

Traditional home loans are based on an existing home’s value. Construction loans are based on the projected value of a home that doesn’t yet exist. That requires extra oversight, milestone tracking, and lender collaboration with builders. The JD.Mortgage team works directly with all parties to ensure smooth draws, inspections, and conversions.

Want a team that handles the heavy lifting while you build? Let’s work together.

One-Time Close Construction Loans

One-time close (OTC) construction loans combine both construction financing and the permanent mortgage into a single process. You close once, lock in your rate, and avoid the hassle of two separate loans. This option is perfect for buyers who want predictability, lower fees, and a streamlined process.

Learn more about other simplified financing paths if you’re weighing all your loan choices.

Modular and Manufactured Home Construction

Some construction loan programs allow for modular or manufactured homes to be financed from foundation to finish. These may require specific builders and HUD-compliant guidelines but can offer affordable options for cost-conscious buyers.

We offer programs for FHA, VA, and USDA manufactured home construction loans in qualifying areas.

Common Construction Loan Challenges (and How We Help)

Building a home can be stressful—especially when delays, material costs, or builder errors pop up. The JD.Mortgage team proactively works to:

• Ensure your builder is approved and experienced
• Coordinate draw disbursements efficiently
• Lock your permanent mortgage rate early (when available)
• Help navigate land prep, zoning, and survey issues

These extra steps protect your timeline and investment. Let’s build a plan that works for you.

Construction-to-Permanent Loan Conversion

Once your home is complete, the loan typically transitions to a permanent mortgage. You can lock in your rate upfront (if using a one-time close loan) or shop rates near completion. We’ll guide you through the conversion process and prepare your final mortgage terms in advance.

Already building? Ask about construction loan refinancing for better terms or updates mid-project.

Why Choose the JD.Mortgage Team for Construction Financing?

Our clients choose us not just for our loan products—but for our hands-on support, builder experience, and flexibility. With construction lending, you don’t just need a loan officer. You need a guide who can anticipate issues, keep the draw process on track, and advocate for your best interests every step of the way.

Read about our proven mortgage process built for homeowners and builders alike.

We’re Here to Help You Build More Than a Home

We know construction loans can be overwhelming—but they don’t have to be. Whether you’re a seasoned real estate investor, a growing family designing your forever home, or someone looking for alternative financing outside traditional banks, we have solutions built around you.

Looking for other options? We offer a wide range of loan programs, including VA, FHA, USDA, Conventional, HELOCs, Seconds, Non-QM (including DSCR and Bank Statement loans), Reverse Mortgages, DPA programs, and more. Let us help you find the right fit.