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

Buying or refinancing? We compare options across our network of 150+ wholesale lenders, explain the trade-offs, and build a plan around your goals. Start with a pre-approval video conversation so you know what to expect before moving forward.

Start My Mortgage 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

Cederholm Mortgage Advisors can work with buyers and builders when the buyer wants to compare financing with the builder’s preferred lender. Compare the written incentive with the full loan costs, rate, lock period and purchase-contract terms. A production-home purchase and a custom construction loan are different transactions. You can choose independent financing when buying from a builder, subject to the contract and program requirements. We can work with your builder and compare the preferred lender’s incentive with the complete rate, points, fees and payment—not the incentive alone. If you are still selecting the site, review our Land & Lot Loans guide.

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

Does a one-time close eliminate all future conditions?

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.

Can I include the land purchase or use land I already own?

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.

How are payments calculated while the home is being built?

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.

Can I use my own builder instead of a preferred lender?

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.

What happens if the build goes over budget or runs late?

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?

We can work with buyers and their builders when they want to compare financing outside the builder’s preferred lender. Bring the incentive details and estimated closing costs so the comparison is useful. Read the CFPB construction-loan explanation and compare the Land & Lot guide if you have not purchased the homesite.

What our clients say

      Excellent rating  
 Based on 47 reviews 
    
  
 
 
      Trustindex verifies that the original source of the review is Google. Paul and his team helped me with a very complicated transaction for a cash out mortgage. I would highly recommend him.
     
   Christopher M 
 September 23, 2026
 
 
 
 
    Trustindex verifies that the original source of the review is Google. 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.
     
   Jayden F 
 September 1, 2026
 
 
 
 
    Trustindex verifies that the original source of the review is Google. 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.
     
   Diana M 
 August 10, 2026
 
 
 
 
    Trustindex verifies that the original source of the review is Google. 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.
     
   Angel M 
 August 10, 2026
 
 
 
 
    Trustindex verifies that the original source of the review is Google. Excelente  atendimento  de Cederholm.
     
   Janaína V 
 May 28, 2026
 
 
 
 
    Trustindex verifies that the original source of the review is Google. Working with Paul and his team was an absolute dream! We had a particularly complex transaction, Paul made navigating feel easy and less stressful.
     
   Kayla b 
 May 12, 2026
 
 
 
 
    Trustindex verifies that the original source of the review is Google. 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!
     
   Samantha C 
 April 18, 2026
 
 
 
 
    Trustindex verifies that the original source of the review is Google. 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.
     
   Nancy S 
 March 11, 2026
 
 
 
 
    Trustindex verifies that the original source of the review is Google. 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!!!
     
   Bianca R 
 December 27, 2025
 
 
 
 
  
 
  
 
 
 
     Verified by Trustindex  Trustindex verified badge is the Universal Symbol of Trust. Only the greatest companies can get the verified badge who has a review score above 4.5, based on customer reviews over the past 12 months. Read more

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.