Construction Home Loans
Finance your custom build from the ground up with construction-to-permanent loans that close once, convert automatically, and protect you through every phase of construction.
Construction Home Loans
Building a custom home is one of the most significant financial undertakings you can make — and getting the financing right from the start is critical. Construction-to-permanent loans (also called one-time-close or OTC loans) combine the construction financing and the permanent mortgage into a single loan, simplifying the process, reducing closing costs, and eliminating the risk of qualifying again when construction is complete.
Key Requirements
Benefits
- ✓One-time close convenience — Close once at the start of construction — no second closing required when the home is complete.
- ✓Lock your permanent rate early — In rising rate environments, locking your permanent rate at the start protects you through the build.
- ✓Interest-only during construction — You typically pay only interest on drawn funds during construction, keeping payments manageable.
- ✓Converts automatically — When construction is complete, your loan converts to a standard mortgage with no new application or closing costs.
- ✓FHA, VA & conventional options — Construction financing is available through multiple programs — we'll find the best fit for your situation.
How Construction Loans Work
During construction, funds are disbursed in draws based on project milestones — foundation poured, framing complete, mechanical/electrical rough-in, insulation, drywall, and final completion. You pay interest only on funds drawn, not the full loan amount. Once the certificate of occupancy is issued, the loan automatically converts to your permanent mortgage with no new closing.
Choosing Your Builder
Construction lenders require your builder to be licensed, insured, and often pre-approved by the lender. Our team works with many Colorado builders and can help you understand what documentation your builder needs to provide. If you already have a builder selected, we'll help get them approved quickly.
Frequently Asked Questions
A standalone construction loan is paid off when the home is complete — requiring you to qualify for and close a new permanent mortgage at that time. A construction-to-permanent (one-time close) loan combines both into a single transaction, saving you a second closing and eliminating the risk of rate changes or qualification changes between construction and completion.
Yes. FHA 203(k) and FHA OTC programs allow construction with as little as 3.5% down. VA also has a construction-to-permanent option for eligible veterans. Our team will identify the best program for your situation.
Lenders typically set aside a contingency reserve (usually 5–10%) in your construction budget for overruns. If costs exceed the approved budget, you may need to provide additional funds. Working with an experienced builder and a detailed contract helps manage this risk.
Many construction loan programs include land acquisition as part of the financing. If you already own the land, its equity can be used toward your down payment. Our team will structure the transaction to work with your land ownership situation.
From application to closing
Apply Online
Complete our secure 5-minute digital application at no cost or obligation.
Team Review
Our team analyzes your situation and recommends the ideal program, term, and rate strategy.
Pre-Approval
Receive a credible pre-approval letter — often within 24 hours — that makes your offer stand out.
Close & Move In
We guide you to the closing table in 21–30 days with zero surprises. Then celebrate.
Build your dream home. Finance it right.
Construction financing is complex — but our team has done it many times. Schedule a call before you sign with a builder so we can get your financing structured correctly from day one.