Ground-up construction loans: sized on cost, capped by the finished value.

Plan on 10–17.5% of total project cost, the gap left by 82.5–90% loan-to-cost, plus points, interest and closing costs. You need more if 65–75% of the completed value comes in lower than the cost-based loan, which happens at 85% LTC and a 70% cap once cost tops about 82% of completed value. Land you already own counts toward your share.

The loan divided by total project cost: land plus construction, and soft costs where the lender counts them. At 85% loan-to-cost on a $400,000 project, the most you can borrow is $340,000 and you fund $60,000. Lenders also cap the loan at 65–75% of the appraised as-completed value and lend the lower of the two, so a strong appraisal can’t lift you past the cost limit.

650 is the only published minimum among the national lenders reviewed for this page in October 2026; most construction lenders don’t publish a floor. Experience and liquidity move construction terms more than a few points of score. One lender preapproves builders on a soft credit pull and runs a hard pull only when a specific loan is submitted.

Yes. Lenders count the lot toward your share of total cost, so owned land can cover most or all of the required equity. Two caveats: some lenders base the land figure on the lower of its value and what you paid, so appreciation may not count, and any existing loan on the lot is paid off at closing, which uses up part of the land advance.

Yes. Lenders refinance land into a construction loan and fund the build in draws; one calls it an acquisition-and-development takeout. Another restores the cash you paid for a lot within 6 months of purchase. On a third lender’s grid, a refinance by a builder with no ground-up history lends up to 65% of as-is value and 82.5% of total cost, rising to 75% and 90% at 10 or more projects.

Usually. The common bar is one completed ground-up project in the last 3 years, and leverage rises with your track record: 90% loan-to-cost programs typically want three or more similar builds. Some lenders accept general-contractor or fix-and-flip experience instead, and at least one has a no-experience tier capped at 65% of completed value.

Often, if you have the record. Construction lenders review the builder as closely as the borrower. One counts ground-up experience on title, as a general contractor or from fix and flip projects; another accepts general contractors whose permits tie to ground-up builds. Without that history, one lender suggests partnering with a licensed general contractor who has a verifiable track record.

12–24 months, interest-only. One lender offers 12, 18 or 24 months with 3- or 6-month extensions; another’s standard ground-up term is 12 months, stretched to 18 at its discretion, with 12–24 months for experienced developers. Choose a term longer than your build schedule: on a $340,000 loan at 10%, each month past completion costs about $2,833 in interest before any extension fee.

Not always. At least one lender closes before permits are issued. Others size the loan assuming entitlements, permits and approved plans are in place, and two advance only 60% of the land when it’s unpermitted, then release a catch-up draw to 75% once permits are approved. Have plans, a line-item budget and zoning settled before you apply.

Sometimes. One lender says its construction loans cover soft costs, and another lets permit fees be paid from loan proceeds at closing. Many publish only land and hard costs, which leaves architecture, engineering, permits, impact fees and insurance to you. Ask for the list of eligible costs in writing before you size the deal, and budget anything excluded as cash.

The construction budget is held back at closing and released in stages. You finish a phase of work, request a draw, and the lender verifies it, often with photos or a virtual inspection, before paying, in as little as 1–2 days at faster lenders. Interest accrues only on funds drawn, and you need cash to carry each phase until its draw arrives.

The overrun is usually your cash. The construction holdback is set at closing, so a 10% overrun on a $320,000 build is $32,000 you fund yourself, on top of the equity you brought. Keep a contingency in your own reserves rather than counting on the holdback, and get any change in scope approved by the lender before the work starts, so the remaining draws still match the budget.

Money set aside at closing to cover interest payments during the build, so you aren’t paying them from pocket each month. Some lenders require one, with a 1-month minimum at two; another advertises no reserves required at closing. A financed reserve is borrowed money, so it adds to the loan balance, and at one lender financing it is how experienced developers reach 90% of cost instead of 85%.

A little, at the advertised floors. Starting rates for ground-up loans ran 8.99%–9.84% in October 2026, against about 7.75%–9.24% for fix and flip loans, with 1–2 points typical on construction. The bigger difference is time: interest on a 12-month build runs twice as long as on a six-month cosmetic flip, though it’s charged only on funds drawn.

Yes. Investor ground-up programs cover 1–4 unit homes, townhomes and condos, so a duplex, triplex or fourplex qualifies at most lenders. Five or more units fall outside them: one lender lists 5+ unit multifamily and mixed-use as ineligible. A build-to-rent plex usually exits into a DSCR rental loan, which weighs the combined rent of all the units against one monthly payment.

Ask before you buy the lot. One national ground-up lender lists vacation and seasonal rentals as ineligible property, so a build-to-Airbnb plan needs a lender that allows it. Line up the exit too: one lender’s short-term rental loan published 75% of value on a purchase and 70% on a cash-out refinance with a 700 minimum score, and refinances are usually sized on actual booking history.

Yes, that is the build-to-rent exit. Once the house is finished and leased, a DSCR loan — 30-year rental financing approved when the rent covers the monthly payment — sized on the completed appraisal pays off the construction loan, and lenders that hold both loans may waive seasoning. On our example, 75% of $520,000 is $390,000, enough to repay $340,000, and at 7.25% over 30 years its P&I is about $2,660 a month for the rent to cover.

Not through these programs. Investor construction loans are business-purpose loans for property you will sell or rent, which neither you nor your family will live in. To build a home you’ll occupy, you need a residential construction or construction-to-permanent mortgage from a consumer lender.