How
to get a construction loan

Overview

This guide covers applying for a construction loan — including how these programs work, what lenders look for, and how to get started. Qualification requirements vary by lender and program type. All loan programs are subject to credit approval and lender-specific criteria.

• Program availability varies by lender
• Qualification requirements vary by scenario
• Multiple program types available
• Speak with a licensed MLO for your situation

Getting Started

JumboLoan.com works with wholesale and portfolio lenders to provide access to programs not available at retail banks. Start our AI-assisted application or call us to discuss your scenario — a licensed MLO will identify the programs best suited to your situation.

• Start at AIMortgageApplication.com
• Licensed MLO reviews your scenario
• Multiple programs compared simultaneously
• NMLS# 1967971 — verify at NMLSConsumerAccess.org

The playbook, in order

Getting a construction loan approved is a sequencing problem — most delays come from doing the right things in the wrong order. The sequence that works:

• 1. Get pre-qualified for the end loan first. Your income, credit, and assets determine the total project you can carry — knowing that number prevents designing a home you cannot finance.
• 2. Secure the lot. Owned land counts toward your equity (often satisfying much of the down payment); land under contract can close with the construction loan.
• 3. Choose the builder before finalizing the lender. Lenders approve builders, and a builder your lender won't approve resets the process. Verify license, insurance, references, and current workload.
• 4. Complete plans and a line-item budget. Open allowances and "TBD" lines are underwriting red flags; a fixed-cost contract with a 5–10% contingency is the fundable standard.
• 5. Apply with the full package. Personal financials plus project documents plus builder file — complete packages approve in weeks; drip-fed ones take months.

Run in this order, the process is unremarkable. Run backward — plans first, financing last — it produces the industry's saddest artifact: finished blueprints for an unfundable house.

What underwriting will scrutinize

Expect the lender to appraise the completed home from your plans (the "subject-to" appraisal), test your debt-to-income against the eventual full payment, verify reserves beyond the down payment, and vet the builder's financial condition — a builder who fails mid-project is the scenario every construction lender prices against. Owner-builders face a steeper path: most lenders require a licensed general contractor, and the programs that don't are a specialty (see our owner-builder guide).

Choosing where to apply

Construction lending is a specialty, not a universal offering — many excellent mortgage lenders simply don't do it, and among those that do, structures differ: one-time-close versus two-close, rate treatment during construction, draw fees, extension terms, and jumbo capacity all vary. Comparing two or three construction programs on those axes — not on advertised rate alone — is worth more than any other hour you'll spend. As a broker (NMLS# 1967971), running that comparison across our panel is the first thing we do with every construction file, from starter builds to luxury custom projects.

Quick answers

How long does the whole process take, application to groundbreaking?

With a complete package: three to six weeks of approval plus permitting time (weeks to months by jurisdiction). The variance is almost entirely in preparation and permits, not lending.

Can I apply before choosing a builder?

You can pre-qualify — full approval waits on the builder file. Use the gap to vet candidates against lender standards, which we can screen in advance.