How is a construction loan different from a mortgage?

A mortgage funds a finished house all at once; a construction loan funds a build in stages (draws) as work completes, then converts to a mortgage at the end. Lenders approve them based on your finances plus the plans and budget for the future home.

Does the land I own count toward my down payment?

Often, yes — equity in the parcel can serve as some or all of the required equity in the project. Your lender will confirm how your specific situation qualifies.

Do you help with the loan process?

Yes. Our pre-construction planning produces the exact deliverable lenders need — complete plans and a detailed budget — and we work alongside your lender through appraisal and draw inspections. Loan submittal packages are a standard output of our planning process.

Who should I talk to about rates and terms?

A construction-loan specialist — rates and structures change with the market and vary by borrower. The trusted lenders below quote current terms; we are builders, not lenders, so we leave the rate talk to them.

FINANCING YOUR BUILD

THE FINANCING

Construction loans, demystified — and a budget lenders trust.

CONSTRUCTION LOANS

Banks fund confidence. We build it.

Financing a custom home works differently than buying one: the bank is lending against a home that doesn't exist yet, based on the plans and budget that describe it. Which means the quality of your pre-construction planning isn't just a building advantage — it is a lending advantage.

Complete construction plans and a detailed, line-item budget are standard deliverables of our planning process — the exact package lenders appraise and approve.

HOW IT WORKS

A construction loan in four movements

1

PRE-QUALIFY

A construction-savvy lender reviews your finances and the project concept, so you shop for land and design with a real number.

2

PLANS & BUDGET TO THE LENDER

The bank appraises the future home from your construction plans and detailed budget — the exact package our planning process produces.

3

DRAWS DURING CONSTRUCTION

The loan funds in stages as work completes, with inspections at each milestone. You typically pay interest only on what has been drawn.

4

CONVERT TO A MORTGAGE

At completion, the construction loan converts to (or is refinanced into) a conventional mortgage on your finished home.

TRUSTED LENDING PARTNERS

We have worked alongside these construction-loan specialists on our clients' projects — they know custom building, and they know the foothills:

Jason Crone — U.S. Bank Home Mortgage, Roseville
jason.crone@usbank.com · 916-343-6001

Sherman Homes Construction Inc. is a builder, not a lender — loan terms, rates, and qualification come from your lender.

FREE WORKSHEET

The budget your lender is going to ask for

Banks fund a build from complete plans and a detailed, line-item budget. This is that budget, line by line, in the order we build it — so you can walk into the conversation with the document the appraisal actually runs on.

We don't share your information. One email delivers the guide, then a monthly note with planning and budget insight. Unsubscribe anytime.

SHERMAN