New Construction Loans
Build a financing plan before you build the home, from the lot and builder to draws and the permanent mortgage.
Residential construction photograph by D Goug. Resized. Source · Pexels License. Illustrative photograph.
One-time-close and two-close choices
Construction-to-permanent financing connects the building phase with the mortgage you keep after the home is finished. A single-close or one-time-close structure combines those phases under one initial closing. A two-close approach uses separate construction financing and a later permanent mortgage.
One closing can reduce duplicated transactions and fees, but does not remove completion requirements or guarantee that no financial information will be checked again. Ask how your rate is set, what changes are permitted and what must happen before conversion. We will compare the complete structure against your plans and timeline.
Plan and builder
Review plans, budget, builder qualifications and contingencies. Start your financing plan →
Draws and inspections
Understand how funds are released as construction progresses. Start your financing plan →
Permanent financing
Compare one-time-close and two-close structures before committing. Start your financing plan →
Smart home financing starts with strategy
Plan for draws and project review
The lender typically reviews the builder, plans, budget, contract, permits and appraisal. Funds are released through draws as approved work progresses. Ask about inspections, interest during construction, contingencies, cost overruns, completion deadlines and responsibility for each request.
Work with your builder and compare lenders
Core construction-loan terms
- Single-close / one-time-close
- A structure arranged at the outset for construction and permanent financing. Compare closing costs, rate protection and the conditions for moving into repayment.
- Draw schedule
- Approved construction funds released in stages as work progresses. Inspection and documentation requirements help control disbursements; they do not replace your own oversight of workmanship.
- Interest during construction
- Many structures charge interest on amounts disbursed rather than the entire approved commitment. Confirm the payment calculation, whether interest reserves are permitted and who pays the interest while you also carry your current housing costs.
- Contingency reserve
- Funds available for unexpected costs. A 10% cushion is a useful scenario to test, not a universal program requirement or protection against every overrun. Clarify whether the reserve is funded, borrowed or required from your own assets.
- Conversion / permanent financing
- The move from construction funding to the long-term mortgage after required completion conditions are met. The term, rate structure and payment follow the loan agreement; do not assume every program automatically becomes a fixed 15- or 30-year loan.
Your financing timeline: plan, build, convert
1. Pre-construction: approve the borrower and the project
Prepare plans and specifications, a detailed budget, builder contract, site information and permit status. The financing review includes income, debts, credit, assets, property value and builder acceptance. Minimum scores, down payment and debt ratios vary; 670 FICO, 20–30% down and a sub-43% DTI are not requirements for every construction program.
Confirm builder credentials, insurance responsibilities and builder’s-risk coverage. Decide what happens to change orders, allowances, overruns and delays. If you already own the land, bring the acquisition details and outstanding liens so we can review its equity treatment.
2. Construction: coordinate work, inspections and draws
Use the approved schedule to coordinate contractor requests, inspections and fund releases. Track the remaining budget against work left to complete. Confirm who initially pays for materials and whether draws reimburse work or pay the contractor directly.
A 6–12 month build may be a target for your project, but permitting, weather and material availability can change the timeline. Match the loan deadline to a realistic schedule and ask about extensions before closing.
3. Completion: satisfy the conversion conditions
Review final inspection, appraisal updates if required, occupancy documentation, lien releases and any outstanding conditions. A Certificate of Occupancy may be part of the requirements, but the specific documents depend on the project and jurisdiction. Regular principal-and-interest repayment begins under the permanent loan terms once the required transition is completed.
See the draw-payment difference
Illustrative construction budget: assume a $500,000 commitment and an 8% interest-only construction rate. A $150,000 disbursed balance produces about $1,000 of monthly interest; a $350,000 balance produces about $2,333; a fully disbursed $500,000 balance produces about $3,333. This simplified illustration uses rate ÷ 12 and excludes taxes, insurance, fees and day-count differences.
The budget needs to handle the later, higher draw balance—not just the first month’s payment. Also include the cost of your current housing, site work and a cushion for delays. Ask our team to model the eventual permanent payment before committing to a build budget.
Photograph by Tima Miroshnichenko; resized. Source · Pexels License. Illustrative photograph.
Explore Mortgage Calculators
Compare purchase, refinance and affordability scenarios, then let our team help turn the estimate into a financing plan.
Questions worth asking
No. The structure reduces separate loan closings, but completion, inspection, occupancy and other conversion conditions still apply. Our team will help you understand the agreement before you begin.
Some construction structures allow eligible land costs or recognize existing land equity. Valuation, ownership history and liens matter. Bring the parcel and purchase details so we can compare the sequence.
Many structures use interest-only payments on disbursed funds. Ask our team to confirm the accrual basis, draw timing and interest-reserve rules. Taxes, insurance and your existing housing costs still need room in the budget.
We can work with buyers and builders on independent financing. The lender must accept the builder and project, and the contract may contain financing and incentive conditions. We will compare the full offer with you.
Changes may need approval and extra cash. Review the contingency, extension rules, rate-lock costs and conversion conditions before closing. Additional funds or more time are not automatically available.
Compare the entire build financing plan
The construction loan is one part of the budget. Start with land, site work, plans, permits, builder costs, a contingency and the housing payment you will carry during construction. Ask which costs can be financed and which must be paid from your funds. A completed-home appraisal is based on plans and specifications, with lender requirements for the finished property.
With one-time-close construction-to-permanent financing, the construction and permanent phases are arranged within one closing structure. That does not make the construction-phase payment identical to the eventual mortgage payment. With a two-close approach, you arrange separate permanent financing; review the additional closing costs, rate exposure and approval requirements.
Questions to ask your builder and mortgage advisor
- How are draws requested, inspected and released?
- Who pays for changes, delays and costs above the approved budget?
- What insurance, builder approval and completion documents are required?
- When does the permanent payment begin, and what happens if the home takes longer?
- Does a builder incentive require a particular lender, and how does its complete financing offer compare?
What our clients say
Paul and his team helped me with a very complicated transaction for a cash out mortgage. I would highly recommend him.
Paul was great. He helped us understand our loan better and put our needs first. I’d strongly recommend his services. Throughout our home buying process, Paul Cederholm demonstrated the highest level of professionalism throughout our home loan process, an amazing ability to explain complex mortgage terms in simple language and a willingness to work evenings and weekends to meet our closing deadline. We got our home purchase loan in Chicago thanks to Paul Cederholm. I would absolutely recommend Paul Cederholm for your home loan because I would recommend Paul. You can trust him and he is very informative. We can't recommend Paul Cederholm enough for your home financing needs.
My overall experience working with Paul was fantastic! All his help made the whole process seem easy. Throughout our home buying process, Paul Cederholm demonstrated a talent for making the mortgage process seamless and stress-free, truly professional lending services that exceeded our expectations and a knack for shopping rates and locking in an amazing deal for us. He is humble and easy-going, which made us feel at ease. I would absolutely recommend Paul Cederholm for your home loan because paul is a truly amazing advisor: el mejor! Without his help, our dream of owning our first home would not have been possible. After our introductory call ended, my husband and I looked at each other and said, "He is the one!" We were absolutely right.
Paul exceeded our expectations by offering excellent advice and answering our questions before we even had to ask them (mind reader!). Paul always had our best interests at heart, and his dedication and passion showed in every conversation. We are thankful to have worked with someone trustworthy and honest; someone who went above and beyond for us.
Thank you, Paul, for taking all of our doubts and worries away.
Thank you for cheering us on!
We absolutely recommend you and your team to anyone looking for the best mortgage advisor. We can't recommend Paul Cederholm enough for your home financing needs.
Exceptional experience with Paul and his team! We knew we wanted to work with Paul not long into our introductory call. He put us at ease as he explained all the details of what it would take to get into our first home. Numbers are scary when it comes to such a large purchase, but he walked us through the documents in a way that was easy to comprehend. He made sure we understood the information and answered all the questions we had before proceeding to the next task. He was always available for a call, through text, and email. Never once did we feel uncomfortable or like we were not being heard and understood. We got the best rate available to us based on our information and also helped us get a rate buy-down! Thank you, Paul and your team, for everything you did. We look forward to working with you again should the time come to refinance or get into a different home. Paul Cederholm brought impressive expertise across mortgage products that helped us find the perfect fit, incredible dedication to finding us the best mortgage rate and a willingness to work evenings and weekends to meet our closing deadline. I'd tell anyone looking for a home loan to call Paul Cederholm — highly recommend Paul and his team as we felt comfortable, understood, and empowered throughout the entire process!. I would highly recommend Paul Cederholm — truly an exceptional mortgage professional.
(Translated by Google) Excellent service from Cederholm.
(Original)
Excelente atendimento de Cederholm.
Working with Paul and his team was an absolute dream! We had a particularly complex transaction, Paul made navigating feel easy and less stressful.
Paul and his team were absolutely amazing! Insanely fast response time to any question I had and amazing explanations throughout the whole process. I can’t imagine using another broker ever again!
If you are looking for a mortgage broker for your next home purchase, I highly recommend Paul Cederholm and his team at Cederholm Mortgage Advisors 🏡.
Paul helped me plan the financing for my new home, and I am so grateful for his guidance throughout the process. At the beginning, I felt nervous because the home buying process can feel very intimidating. With Paul’s care, patience, and expertise, I grew into a confident home buyer by the time we reached closing 🌿.
Paul was always available to answer my questions and explained everything in a clear, supportive, and non-intimidating way. He stayed one step ahead throughout the loan process and helped ensure my loan approval moved along quickly and smoothly.
Paul also has a wonderful team. Their attention to detail and clear communication helped me feel supported and never overwhelmed during the process 🌸.
I truly loved working with Paul. He was wonderful to have by my side during such an important step in my life. If you are looking for a knowledgeable and caring mortgage advisor who will guide you every step of the way, I wholeheartedly recommend Paul Cederholm and his team.
Buying my first house was an exceptional experience because Paul was tremendously helpful, and communicative. I can’t thank him and his team enough and highly recommend!!!
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Recently I had the pleasure of working with Paul and I can confidently say that my experience was nothing short of exceptional.
Trust is a crucial element when it comes to financial decisions, He took the time to understand my unique needs and goals, ensuring that every step of the process was transparent and tailored specifically to me. I never felt rushed or pressured; instead, I felt supported and empowered to make informed choices. Whether it was providing insights into market trends or introducing me to other professionals who could assist with my financial journey, Paul went above and beyond to ensure I had access to the best tools and information available.
I can say that Paul genuinely cares about his clients and strives to build lasting relationships. I can't recommend him enough for anyone looking for a mortgage broker who feels like family, fosters trust, and provides invaluable resources. Thank you, Paul, for making this experience so positive and rewarding!
We started the process in June and closed in November because we were indecisive and Paul was patient, he heard our request and never pushed us to buy until we were comfortable with our purchase. Luckily, he waited on us and we closed on the perfect home. We loved his 24/7 availability for us even on his vacation days. Thanks for an amazing work !
Paul is a great lender, my clients love working with him. He is very detailed oriented, organized, responsive. Always trying to find the best program/rates for everyone. I truly recommend his services.
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You and your team were very helpful throughout the entire process! I could always rely on you to help answer questions and be available at all times. I would highly recommend!
Paul was amazing to work with! Unbelievable response times and guided us through every step of the process.
Paul was great to work with - so friendly, understanding and helpful! We felt very cared for throughout the process and he never made us feel like we were bothering him with our questions. He was always upfront and honest and we are so grateful for his help!
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We bought an amazing Condo in the heart of DTC. Paul was very helpful and made us, first home buyers, feel very confident in the process of buying a home. I would highly recommend!
Paul went above and beyond to get all the numbers to work for us. He was available for questions at any time, even at the most unusual times. He consistently would give us updates and let us know that everything was going well or immediately would call us if there are any issues. The whole process went incredibly smoothly and made the home buying process super easy!
Thank you Mr Paul, you were truly amazing and on top of everything! Love your proactive approach in covering all anticipated requests ahead of putting into UW. Your professionalism and high level expertise truly shines thru and I’m so glad we connected through the grapevines. Can’t thank you enough and look forward to doing this again!
My wife and I worked with Paul when purchasing our first and second home. He was recommended to us from a trusted friend so we decided to go with him when trying to find the best loan for us. Going into it, we had no idea what we were doing but Paul was extremely attentive, did a great job explaining the details, and I felt like he always put our needs first. It was a pleasure working with Paul and we will definitely be working with Paul again in the future!
Was a great experience working with Edge to get into our first home. Everything was made easy and clear for us to understand
Paul was excellent! He communicated all of our options and so we can make the best decision possible! He kept us informed the entire time as to where we were in the process so we were able to have a smooth and efficient closing!
Working with Paul and his team was amazing! Paul was straight to the point, gave us guidelines on what to and not to do, made us feel comfortable buying a home, and made it a very simple process. We will forever work with Paul and continue to recommend him to everyone we know!
Paul was absolutely amazing to work with. He kept us in the loop through EVERY step of the home mortgage process. He took the extra time to explain things we didn’t understand, and also had all of our best interests in mind. I truly felt like we were in the best hands possible when it comes to a big financial decision! We can’t thank you enough!!!
Paul was incredible! He made my first-time home buying experience way easier than I had expected. He was incredibly knowledgable and more than willing to explain anything I wasn't sure of. He was super helpful throughout and made the whole process go smoother than I thought was possible.
Paul is amazing! I would highly recommend working with him. He is so responsive and truly cares about each and every client. There are no questions left unanswered when working with Paul and he makes the home buying process easy peasy.
Paul is full service. That is a hard thing to find anymore, and I am proud to be partnered with such a professional, creative, customer-oriented loan officer. His system and process is streamlined and user friendly, making the buyer’s process less stressful, and making my job easier. I love the level of communication on every transaction, and Paul always asks if there is anything that he could improve on; constantly striving to be the best. I have raving reviews from our mutual clients. Paul is an excellent choice when you need a home loan! Highly recommend.
Working with Paul was an incredible experience. I was the listing agent for Sellers and he was the lender for the Buyer. He promised a smooth transaction up from and that’s exactly what we received. He met every deadline, early in fact, and was on the ball with keeping us updated every step of the way. His communication and correspondence was spot on. Thank you, Paul, for such a great experience and a smooth transaction!
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Hands down the easiest financial process I have ever been through. I refinanced my home loan with Paul and his team and I just sat back and relaxed while they did their thing. It was a quick and seamless process. I can’t thank Paul enough for his advice and expertise. Paul’s personal attention and his availability throughout the process always made me feel like I was his only client. Top notch service! I highly recommend Paul and his team.
Great team and service. Answered all of our questions and made sure we understood the refinance process. 10/10 recommend!
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Paul was wonderful to work with during our home-buying experience! He was very professional, personable and patient as we worked thru the various scenarios available to us, and was true to his word when he said it was his number 1 goal to ensure we were left in a better situation than when he'd come to us. Thanks to Paul's efforts and diligence, we got precisely the outcome we were looking for, and couldn't be happier!
I highly recommend Paul and his team. They worked their way and explained each step to me and what was expected of me to be quick and efficient. Thank you for a great experience.
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Paul is a great lender he made the process painless and was very informative. He helped get our credit up and rate down so we could get the best situation for our house purchase.
I recommend Paul for any financing you may need!
Paul has been one of the easiest Lenders to work with. Super honest businessman and extremely knowledgeable. I will continue to do business with him. He is a great and trustworthy lender!
Paul is straight up a rockstar. If you have a deal that a lender said can’t be done, or they don’t know how to fix. Paul has the answers and can get the job done. Very creative when it comes to helping structure his clients Loans and giving the advice to get the deal closed. He is an amazing lender partner.
It is truly a pleasure partnering with Paul Cederholm! He is an exceptional Loan Officer who deeply cares for his clients and those he works with. As a Realtor, it is extremely important to have industry partners that value your clients as much as you do. He will jump through all the hoops needed to be able to get the best product for the client and close the deal all while impeccably communicating each step to all that are involved. Thank you Paul for taking such great care of my clients!
Paul was extremely helpful with the refinance process. He kept us in the loop during the entire process and when the original plan fell through, he was able to work a new plan that turned out better than the original. Thanks Paul!
Read more about Paul Cederholm and our team on Google Business Page and Experience.com.
Plan your next move
Bring your goals and a property address if you have one. Paul Cederholm, mortgage expert and real estate financing strategist, can help you compare the financing choices and plan your next step.
Ready to begin? Start your loan application. Prefer a direct conversation? Call 303-931-6798.
*Information, scenarios, and calculations are for educational and illustrative purposes only—not a loan offer, a commitment to lend, a rate quote or an approval. Programs, costs and qualification requirements depend on the borrower, property, selected lender and current guidelines. Examples are not guaranteed results. Our team can review the details for your situation.