Construction Loans to Build, Buy Land, or Finance a Custom Home
A construction loan helps you finance the land, the build, and in some cases the permanent mortgage with one structured loan plan.
At Andes Mortgage, we help you compare construction loan options for primary homes, VA borrowers, FHA buyers, self-employed borrowers, second homes, and real estate investors.
Whether you are building your dream home from the ground up, buying land and building later, or financing an investment property project, we help match you with the construction loan program that actually fits the project.
Conventional, FHA, USDA, VA & Non-QM construction loan options
One-time close and construction to perm available
Land + construction + permanent financing options
A Construction Loan Is Different From a Regular Mortgage
A regular mortgage finances a home that already exists.
A construction loan helps finance a home that has not been built yet. That means the lender is not only reviewing you as the borrower — they also need to review the builder, the plans, the budget, the land, the appraisal, and the timeline of the project.
That is why construction financing is more detailed than a standard purchase loan. The loan has to answer questions like:
→ Can the borrower qualify?
→ Can the builder complete the project?
→ Is the budget realistic?
→ What will the home be worth once completed?
→ How will funds be released during construction?
→ What happens when the home is finished?
This is where Andes Mortgage helps. We do not just quote a rate. We help structure the project correctly from the beginning.
The lender guides you provided support positioning this around one-time close construction financing, where construction and permanent financing can be rolled into one loan, with funds released through construction draws as work is completed.
A construction loan isn't really all that difficult. Here's how it works.
One closing
You close once before construction begins.
Construction Phase
Funds are released in draws as work is completed and inspected.
Permanent mortgage
Once the home is complete, the loan transitions into the long-term mortgage phase.
Less Uncertainty
You are not starting over with a brand-new mortgage application after the home is built.
Construction Loan Options with Andes Mortgage
There is no single “best” construction loan for everyone. The right program depends on whether you are building a primary home, using VA benefits, buying with FHA, self-employed, building a second home, or financing an investment property.
That is why we start with the project first — then match the loan around it.
Conventional Construction Loans
A conventional construction loan may be a good fit if you have stronger credit, documented income, and are building a primary residence or second home. This option can work well for borrowers who want a traditional mortgage structure and are building a site-built, modular, or eligible manufactured home depending on the program.
- Strong-credit borrowers
- Primary residence or second home builds
- Borrowers with traditional income documentation
- Have at least 10% down payment available
FHA Construction Loans
An FHA construction loan may be a good option for borrowers who want a lower down payment path and are building a primary residence. FHA construction financing can allow eligible buyers to combine the land, construction, and permanent FHA mortgage into one structured loan plan.
- Buying a primary home
- Lower down payment borrowers
- Buyers who have lower credit scores
- First-time home buyers
VA Construction Loans
A VA construction loan can be one of the most powerful options for eligible veterans, active-duty service members, and surviving spouses. With the right project and approved builder, VA construction financing may allow eligible borrowers to build a home with no down payment.
- Eligible veterans
- Active-duty military
- VA buyers who want to build instead of buy existing
- Want to use $0 down benefit
Non-QM Construction Loans
A Non-QM construction loan may be a better fit when the borrower does not qualify under traditional agency guidelines. This can help self-employed borrowers, business owners, high-net-worth borrowers, or borrowers with more complex income documentation.
- Self-employed borrowers
- Business owners
- Borrowers who need flexible income documentation
- Higher loan amount projects
DSCR Construction Loans for Investors
A DSCR construction loan is built for real estate investors. Instead of qualifying mainly from personal income, the loan is evaluated using the projected rental income of the property. This can be a powerful option for investors building a rental property or completing a major rehab intended to become an income-producing property.
- Build-to-rent investors
- Rental property investors
- Long-term rental projects
- Short-term rental projects where eligible
Investor Ground-Up Construction Loans
For investors who are building non-owner-occupied properties, a short-term investor construction loan may be the better fit. These loans are usually designed for builders and investors who plan to build, sell, refinance, or stabilize the property after completion.
- Experienced investors
- General contractors and builders
- Need funding for small and large developments
Construction Loan FAQs
A construction loan is financing used to build a home or investment property. Instead of funding the full loan amount at once, money is usually released in stages as construction work is completed and inspected.
A one-time close construction loan combines the construction phase and the permanent mortgage into one loan process. You close before construction begins, then the loan transitions into long-term mortgage payments after the home is complete.
Yes, some construction loan programs can include the land purchase, construction costs, and permanent mortgage structure in one plan. The exact structure depends on the loan program, land contract, appraisal, and borrower qualifications.
Yes, in many cases. If you already own the lot, available land equity may help reduce the cash needed at closing. The lender will review the land value, payoff amount, title, and the completed appraised value.
Down payment depends on the program. VA construction loans may allow eligible borrowers to build with no down payment, FHA construction loans may offer low down payment options, and conventional, Non-QM, DSCR, and investor construction programs usually require more equity.
Not sure which construction loan fits?
Answer a few questions and we’ll do the heavy lifting for you. We’ll match you with the best construction loan options for your project.
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We are construction loan specialists licensed in AL, GA, FL, TX and SC.