Construction loans help you borrow money to build a house from the ground up. If you’re buying a house that already exists, you’d use a regular mortgage. But if you’re starting with just empty land, you need a construction loan.

These loans can be a bit harder to get, and they might have higher interest rates, but many construction loan lenders are willing to give you the money you need for your unique project. The best construction loan lenders will give you low-interest rates and flexible loan amounts.

Best Construction Loan Lenders

They don’t ask for a lot of money upfront or high credit scores, so it’s easier for more people to qualify. These leading construction loan lenders offer construction loans in various areas, and they have different kinds of loans to match what you need for your particular situation.

How to Choose the Best Construction Loan Lender

Before you apply for a construction loan, take the time to evaluate your circumstances to figure out the most suitable type of loan for your needs. Consider important factors such as the money you have saved for a down payment, your credit score, and the total amount you intend to borrow.

These elements are crucial when you’re in the process of finding the right construction loan lender. Additionally, it’s advisable to obtain cost estimates from contractors. This will give you a clearer picture of the overall project expenses and help you make informed decisions as you navigate through the loan application process.

Factors to Consider Before Choosing a Construction Loan Lender

When you’re deciding on a home improvement loan or lender, consider these key factors:

  • Low Rates: Opt for a construction loan with the lowest possible interest rates. This helps in minimizing the overall interest payments over the loan period. Seek out lenders offering competitive and low-interest rates.
  • Flexible Down Payment Requirements: Some construction loan lenders insist on a standard down payment of 20%, but others are more flexible. Depending on your savings, look for a lender with adaptable down payment requirements that align with your financial situation.
  • Flexible Credit Score Requirements: Don’t worry if your credit score isn’t perfect. Some lenders are open to applications from borrowers with fair credit. Look for a construction loan lender that considers a range of credit scores to accommodate various financial situations.
  • Geographic Location: Ensure that the construction loan lender you choose provides services in your area. This ensures a smoother process and a better understanding of local regulations and conditions.
  • Customer Support: Opt for construction loan lenders with a track record of high customer satisfaction and robust customer support. A supportive and responsive customer service team can make your loan experience more straightforward and less stressful. Check reviews and testimonials to gauge the satisfaction levels of previous borrowers.

Our Best Construction Loan Lenders

Check out our list of the best construction loan lenders. We’ve picked these construction loan lenders because they have great rates and flexible terms, and they’re committed to giving you awesome customer service. Take a look at our suggestions to find the perfect financial partner to make your construction dreams come true!

FMC Lending

If you’re in search of a construction loan but find yourself with less-than-ideal credit, FMC Lending emerges as a favorable option, providing swift funding without imposing any minimum credit score requirements.

Pros & Cons

  • Pros:
    • No minimum credit score requirement.
    • Expedited closing time, as fast as seven days.
    • Stated income is accepted; no proof is needed.
    • Prior bankruptcy is allowed.
  • Cons:
    • Down payment requirements range from 20% to 30%.
    • Interest rates are comparatively higher.
    • Short loan terms, typically ranging from one to seven years.

FMC stands out as a full-service private money lender, focusing on borrowers who have faced challenging financial situations and may not fit the criteria of traditional bank lending. What distinguishes FMC is its reliance on asset-based lending rather than credit-based lending, allowing for more creativity in designing loan programs backed by collateral.

Flexibility is a key feature of FMC’s loan terms. The duration can vary widely, depending on your specific situation and the chosen program. FMC accommodates borrowers who may need short or extended terms, tailoring their offerings to individual needs.

While interest rates for construction loans with FMC tend to be higher than those for regular mortgages, some programs come with the advantage of no prepayment penalties. FMC streamlines the process by enabling you to consolidate the purchase and construction costs into a single loan closing.

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Notably, FMC can finance the combined loan-to-value (CLTV) up to 100%, allowing you to bring other loans or property collateral into the deal. This flexibility makes FMC an appealing choice for borrowers with lower credit scores, as it allows you to apply for a construction loan and a permanent mortgage within a single program, without the need to provide proof of your credit score. If you’re navigating the construction loan landscape with less-than-stellar credit, FMC Lending stands as a viable and accommodating solution.

TD Bank

TD Bank earns our recognition as the best flexible-use construction lender, providing a unique blend of features tailored to meet the specific wants and needs of borrowers. Notable among these features are adjustable and fixed-rate options, as well as a versatile single-close program.

Pros & Cons

  • Pros:
    • A flexible single-close program is usable if you already have a loan for the land.
    • Offers both fixed and adjustable rate options to cater to individual preferences.
  • Cons:
    • Requires interest-only payments during construction, with no payment deferment.
    • Rates and credit score minimums are not readily available on the website.

Founded in 1852 in Portland, Maine, TD Bank has established itself as a reliable financial institution. The standout feature of their single-close construction loan is its flexibility, accommodating borrowers who already own the land or have an existing loan on the land.

In such cases, TD Bank disperses funds to settle the existing loan balance and seamlessly rolls it into its single-close loan structure. While specific credit score minimums are not published, TD Bank considers various factors, including credit scores, down payment size, borrower income, and existing debt when determining eligibility.

These same factors influence the options available for interest rates. For instance, borrowers may opt for an adjustable-rate, interest-only loan during the 12-month construction period, which can seamlessly transition into a fixed-rate loan for a 30-year mortgage upon completion of the property.

Traditional financing with TD Bank requires a minimum down payment of 20%. For those in need of a flexible construction loan, TD Bank stands out as an excellent option, offering single-close loan alternatives tailored for construction only or for both construction and land.

Whether you’re seeking the adaptability of adjustable rates, the stability of fixed rates, or a seamless single-close process, TD Bank provides a comprehensive solution for your construction financing needs.

Nationwide Home Loans Group

Nationwide Home Loans Group emerges as a standout choice for those seeking construction loans, boasting accessibility across all 50 states, attractive low-interest rates, and accommodating down payment requirements.

Pros & Cons

  • Pros:
    • Nationwide coverage in all 50 states.
    • Competitive low-interest rates.
    • Flexible and low down payment requirements.
  • Cons:
    • A minimum credit score of 640 is required.
    • The minimum loan amount is set at $150,000.

Nationwide Home Loans Group operates under the umbrella of The Federal Savings Bank, a federally-charted bank with a proud veteran ownership. This construction loan is available across the entire United States, making it a versatile option for individuals embarking on construction projects.

The minimum loan size is set at $150,000, and noteworthy is the feature that mortgage payments are deferred until the construction reaches completion. To qualify, borrowers need a median credit score of at least 640.

Down payment flexibility is a key strength, with specific loan programs catering to varying needs. For instance, the VA construction loan allows for a minimal 0% down payment, while the FHA loan offers a reasonable 3.5% down payment.

What sets Nationwide apart is its ability to provide these advantageous low down payment programs with competitive rates, a notable departure from the standard 20% down payment requirement enforced by many other construction loan lenders. Whether you’re in search of nationwide accessibility, low rates, or flexible down payment options, Nationwide Home Loans Group aims to meet your construction financing needs.

GO Mortgage Corporation

GO Mortgage Corporation is a standout choice for those seeking construction loans, offering low down payment requirements and a dedicated lending team to guide you through the process.

Pros & Cons

  • Pros:
    • Licensed in 40 states, providing extensive coverage.
    • Low down payment requirements, facilitating affordability.
    • Expertise in government-backed loan programs for added support.
  • Cons:
    • Recommended minimum credit score range of 640 to 680.
    • The minimum loan amount is set at $175,000.
    • Not suitable for investment properties.

Headquartered in Wisconsin and established in 1995, GO Mortgage Corporation specializes in single-close construction loans, making it a seasoned player in the field. This particular loan is available in 40 states and aligns with government-backed mortgage programs such as VA, Fannie Mae, FHA, and USDA.

Consequently, the terms of the loan, including credit scores, interest rates, down payment percentages, and minimum and maximum loan amounts, adhere to the regulations set by these programs. For instance, if you qualify for the FHA program, your down payment could be as low as 3.5%. Under the VA or USDA loan programs, you may even qualify for no down payment.

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Opting for the Fannie Mae program could allow a down payment as low as 5%. Interest rates for these government programs closely align and are contingent on your credit score. The minimum loan amount typically starts at $175,000, and the minimum credit score for GO’s single-close construction loan is 640, with 680 being the minimum score for the Fannie Mae program.

While there is no maximum loan amount for construction loans, there are certain limitations on how much the government agency will guarantee. For instance, the VA typically guarantees loans up to $726,200, with variations in more expensive counties.

GO Mortgage Corporation distinguishes itself with a business model centered on a highly trained construction lending team specializing in low down payment government agency programs. This expertise earns them recognition as the best construction lender for those seeking a primary goal of a low down payment.

Whether you’re navigating government-backed programs or looking for guidance on low-down payment options, GO Mortgage Corporation is well-equipped to meet your construction financing needs.

VA Nationwide Home Loans

VA Nationwide Home Loans stands out as the premier VA construction lender, offering the convenience of a single-close process in every state, along with the potential for up to 100% financing.

Pros & Cons

  • Pros:
    • Available in all 50 states, providing nationwide accessibility.
    • No down payment requirements, making it more affordable.
    • Offers both one-time and two-time close options.
    • Extends to second homes or multi-family homes, broadening eligibility.
  • Cons:
    • Recommended minimum credit score of 640.

True to its name, VA Nationwide Home Loans operates in all 50 states, ensuring that veterans across the country can benefit from their specialized construction loan offerings. To determine eligibility for their program, a straightforward online form is available for potential borrowers to check their home’s suitability.

The flagship loan from VA Nationwide is a single-close option, streamlining the process by combining land purchase, house construction, and the mortgage into a single, rate-locked loan. Notably, no payments are due during the construction period, providing added flexibility.

VA Nationwide Home Loans has the potential to qualify borrowers for a 0% down payment, although it’s important to note that cash is still required for the VA funding fee. This construction loan lender has the capacity to extend loans up to $3,000,000 or more, showcasing flexibility through its one-time and two-time close options.

Whether you are pursuing a construction loan for a one-time project or considering multiple construction phases, VA Nationwide Home Loans has tailored solutions.

Overall, VA Nationwide Home Loans emerges as an excellent choice for veterans seeking affordable construction loans, with accessibility in all 50 states and the added advantage of up to 100% financing. If you’re a veteran exploring construction financing options, VA Nationwide Home Loans is well-positioned to meet your needs.


For borrowers seeking an online construction loan lender, Normandy stands out with its streamlined application process, speedy funding, and the option to prequalify.

Pros & Cons

  • Pros:
    • Borrowers can prequalify, providing a clearer understanding of loan eligibility.
    • Flexible loan amounts catering to various financial needs.
    • Average closing time of 30 days, ensuring a quick and efficient process.
  • Cons:
    • Mandatory down payment ranging from 10% to 20%.
    • Limited availability, operating in only 15 states.

Headquartered in Rochester, NY, Normandy is fully licensed to offer construction loans in 15 states. Their loan offerings span a range from $95,000 to $5 million, catering to diverse construction needs. Normandy provides different types of construction loans, including those for individuals acting as the builder, those hiring a builder, and loans to finance newly built homes constructed on speculation.

Additionally, they offer renovation construction loans for properties in need of extensive remodeling work, requiring a licensed contractor. Normandy’s down payment requirements are tiered based on property appraisals.

Qualifying for a 10% down payment is possible for properties appraised at $726,200 or less, while properties between $726,200 and $1 million require a 20% down payment. Properties exceeding $1 million necessitate a 25% down payment. It’s worth noting that while you can include the land purchase in the construction loan, you’ll still need to provide 25% of the land’s purchase price in cash.

The construction loan rates offered by Normandy depend on factors such as your credit score, down payment size, and income. While specific credit score minimums are not published on their website, Normandy invites you to prequalify online to receive a customized terms proposal.

Normandy ensures a user-friendly experience for borrowers through its easily accessible homepage. Here, borrowers can apply for pre-qualification, request construction draws, and make loan payments. This convenience and accessibility contribute to Normandy being our top choice for the best online borrower experience.

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How to Apply for a Construction Loan

When applying for a construction loan, you’ll need specific documents to support your application. These include architectural plans and drawings, certifications from your builder, evidence of building code compliance, and a schedule for regular inspections.

Additionally, you’ll be required to submit a detailed construction budget and timeline. Before initiating the application process, it’s advisable to ensure your financial readiness.

This involves confirming that your credit score is in good standing, maintaining a low debt-to-income ratio, and having sufficient savings to cover both the down payment and closing fees. Taking these steps beforehand enhances your chances of a successful construction loan application.

In Conclusion

There are several commendable options to consider when navigating the realm of construction loans. According to Investopedia, the standout choice for a construction loan lender is Nationwide Home Loans Group, which provides a range of flexible and cost-effective construction loan solutions.

With programs offering up to 100% financing, this construction loan lender caters particularly well to borrowers facing cash constraints. What sets Nationwide Home Loans Group apart is its extensive reach, making loans accessible to borrowers in all 50 states, and ensuring nationwide coverage.

For those prioritizing an online loan process, Normandy proves to be a solid option. Meanwhile, if saving hasn’t progressed as planned, GO Mortgage Corporation stands out with its low down payment offerings. Each of these construction loan lenders addresses unique needs, providing borrowers with tailored solutions for their construction financing journey.

Whether you prioritize flexibility, online accessibility, or low down payment options, the diverse range of construction loan lenders ensures that you can find a construction loan that aligns with your specific requirements and financial goals.


What are Construction Loan Interest Rates

The interest rates for construction loans vary depending on whether you opt for a loan solely for the construction period or a combined single-close loan that encompasses both the construction and the permanent mortgage. Construction-only loans are deemed somewhat riskier.

The interest rates for these loans typically fall within the range of 5% to 10%, which is generally at least 5% higher than the rates for traditional permanent mortgages used to purchase existing homes.

What are the Most Common Construction Loans?

There are various types of construction loans, including construction-to-permanent, construction-only, renovation, owner-builder, and end loans. Among these, construction-to-permanent loans stand out as the most common and widely favored type of construction loan for consumers.

Who is a Soft Loan Agency?

The International Development Association (IDA) is a global financial institution that extends assistance to economically disadvantaged nations through the provision of loans. It is commonly known as the soft loan window of the World Bank. The primary objective of the IDA is to offer grants and concessional loans to the most impoverished countries around the world.

What is Financing Construction?

Construction finance is a financial mechanism that supplies the necessary capital to support new projects within the construction sector. Typically utilized by construction companies, it serves to bridge the financial gap between completing the construction work and actually receiving payment for the completed projects.

What Do You Mean by Financing Project?

Project finance pertains to the financing of extended-term projects, which may include public infrastructure or services, industrial initiatives, and other ventures, through a specialized financial arrangement.

This financial structure often involves a combination of debt and equity. The revenue generated by the project is then utilized to manage the debt and fulfill the repayment requirements for both debt and equity components.

How Do I Get Financed for Construction?

Before initiating the application process, ensure that your financial affairs are well-organized. Begin by enhancing your credit score if needed and accumulating the necessary savings for the down payment and closing fees.

Once you are prepared, organize your documentation and have it readily available when applying for financing. Additionally, provide a comprehensive construction budget and timeline to support your application. This preparation enhances your chances of a successful loan application and streamlines the overall process.


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