Financing a new home construction is different from financing an existing home purchase — and most buyers don’t realize that until they’re already deep in the process. As a former mortgage broker, Evanel Julmeus is uniquely positioned to help YFHB clients navigate their financing options long before breaking ground.
Construction-to-Permanent Loans
The most common financing path for custom home builds is a construction-to-permanent loan (also called a “one-time close” loan). This loan funds the construction phase and then automatically converts to a traditional mortgage once the home is complete. You only go through one approval process and one closing.
What Lenders Look For
For a construction loan, lenders typically want to see a credit score of 680+, a debt-to-income ratio below 45%, a down payment of 10-20%, and documented income. They will also require detailed construction plans, a licensed builder contract, and land ownership or a land purchase contract.
FHA and VA Options
If you qualify, FHA construction loans require as little as 3.5% down. VA construction loans are available to veterans with 0% down. These programs have specific requirements and not all builders are approved for them — ask us about our eligibility.
Starting the Process Early
The biggest mistake buyers make is starting the financing conversation too late. Ideally, you want to be pre-qualified before you select your lot. This ensures you know your true budget and avoids disappointment later in the process.
How YFHB Helps
Evanel’s mortgage background means he can review your financial situation early and point you toward the right loan product before you’ve committed to anything. This is a service no other local builder offers — and it has saved our clients thousands of dollars.
Ready to talk financing? Contact us today — the conversation is free and there’s no obligation.