Understanding Build-On-Your-Lot Financing

Instead of paying for a completed home, construction financing is designed to fund your project in stages, from breaking ground to move-in day. 

Key things to know about build-on-your-lot financing:

• Two-in-one loan structure: Most homeowners use a construction-to-permanent loan, which combines the short-term construction loan with a long-term mortgage after the build is complete.
• Draw payments: Funds are released in phases called “draws” as construction milestones are met, ensuring you only pay for completed work. 
• Interest-only during construction: You typically make smaller, interest-only payments while your home is being built. 
• One closing, fewer fees: Construction-to-permanent loans often require just one closing, saving time and reducing costs.
• Use your land as equity: If you already own land, you may be able to use your land equity in lieu of a cash down payment, a major advantage that reduces upfront costs.

Financing Options Available With Value Build Homes

Every homeowner’s financial situation is unique, which is why Value Build Homes partners with trusted lenders to offer flexible financing options for building a home. Whether you already own land or are starting from scratch, there’s a solution designed to fit your budget and timeline. 

Common financing options include:

• Construction-to-Permanent Loans: A single loan that covers both the construction phase and the permanent mortgage after your home is built. With one closing, you save time and reduce fees.
• Lot and Construction Loans: Ideal for buyers who need to purchase land and finance construction simultaneously, allowing both costs to be combined into a single, manageable loan. 
• FHA, VA, and USDA Loans: Government-backed programs that may allow lower down payments or reduced credit requirements for qualified buyers.
• Land-Equity Options: If you already own land, you may be able to use your land’s equity toward your down payment, minimizing upfront costs and maximizing affordability.

How Value Build Homes Can Help

Navigating finance options can feel overwhelming, but it doesn’t have to be. Value Build Homes simplifies every step by connecting you with lender partners who specialize in construction financing and understand the unique needs of building on your land. 

With flexible financing options for building a home, clear communication, and support from start to finish, we help make your dream of homeownership achievable. 

Ready to start planning your build? Connect with our team today to explore financing options for building a home and get pre-qualified for a Value Build Home that fits your land, budget, and lifestyle.

Structured Summary: Financing at a Glance 

• Build-on-your-lot financing funds your home in stages and converts to a traditional mortgage once construction is complete.
• Construction-to-permanent loans are the most common type of loan used to fund build-on-your-lot homes, combining both phases into a single loan with a sole closing. 
• Lot + construction loans are available if you’re buying land and building at the same time.
• Government-backed loans (FHA, VA, USDA) may reduce down payments for qualified buyers.
• Land equity can often be used in place of a cash down payment if you already own land.
• Value Build Homes partners with experienced lenders to guide you through every step, ensuring a clear, efficient, and affordable process.

FAQs

What financing options are available for building a home on my land?

• Homeowners typically choose from several financing options for building a home, including construction-to-permanent loans and government-backed programs such as FHA, VA, or USDA loans. Value Build Homes partners with trusted lenders who specialize in build-on-your-land financing to help you find the best option for your needs and budget.

Can I use my land as a down payment for the property? 

• If you already own land, you may be able to use your land equity as a substitute for a cash down payment. This can significantly reduce your upfront costs, making financing your new home more affordable. Value Build Homes and its lender partners can help determine how much equity you can apply toward your construction loan.

What is a construction-to-permanent loan, and how does it work?

• A construction-to-permanent loan covers both the construction phase and the long-term mortgage. During construction, funds are distributed in stages (called “draws”) as work is completed, and you typically pay interest only on what’s been drawn. After your home is finished, the loan converts into a standard mortgage with regular monthly payments.