What is a Construction Loan, and how does it work?

A Construction Loan is a short-term loan used to finance the building of a new home. Funds are disbursed incrementally to cover construction phases. Once construction is complete, the loan typically converts to a permanent mortgage. Learn more in our construction FAQ or HUD’s housing development page.

Common situations where Construction Loans are beneficial:

How do I qualify for a Construction Loan with Money Well Lending?

To qualify, you typically need:

• Good to excellent credit (680+ FICO score).
• A detailed construction plan and budget.
• Adequate income and assets to support the project costs.
• A qualified, licensed builder.

See our mortgage basics.

Does Money Well Lending provide the builder, or can I select my own?

You are free to select your own builder, provided they meet lender requirements, including licensing, insurance, and proven experience with similar projects. This flexibility ensures your new home meets your exact specifications.

Can the cost of land be included in a Construction Loan?

Yes. Construction Loans can cover both the purchase of the land and the construction costs. This streamlined process simplifies financing and can often be more cost-effective. Explore this in our loan programs.

What happens when construction is completed?

Once construction finishes, the Construction Loan typically converts to a permanent mortgage. Money Well Lending will guide you through this transition, ensuring a seamless shift from construction to traditional homeownership financing. .

What are Down Payment Assistance (DPA) programs?

Down Payment Assistance programs help homebuyers overcome the financial hurdle of upfront costs associated with purchasing a home. These programs can provide grants, loans, or deferred-payment options to cover part or all of your down payment and closing costs. Learn more at HUD’s homeownership page.

Who qualifies for Down Payment Assistance?

Qualification varies based on the specific DPA program, but general criteria often include:

• Being a first-time homebuyer or not having owned a home in the last three years.
• Meeting income and purchase price limits.
• Completing a homebuyer education course.

Check our down payment guide.

Does Money Well Lending offer Down Payment Assistance directly?

Money Well Lending partners with state and local agencies to provide access to a variety of Down Payment Assistance programs. Our experts guide you through identifying suitable options and assist in applying to maximize your financial opportunities.

Are Down Payment Assistance funds required to be repaid?

Repayment terms vary by program:

• Grants typically do not require repayment.
• Deferred loans usually require repayment only if the home is sold, refinanced, or no longer used as a primary residence.
• Low-interest loans have monthly payments spread over several years.

See our down payment guide.

Can Down Payment Assistance be combined with other loan types?

Yes. DPA programs are frequently combined with FHA, VA, USDA, or Conventional loans, making homeownership accessible to a wider range of buyers across our service areas, from Vancouver, WA, to Liberty Hill, TX. Explore options in our loan programs.