Question 1

How do construction loan draws work?

Accepted Answer

The lender releases funds in stages tied to completed work. An inspector verifies each milestone before the next draw is released.

Question 2

Can I act as my own general contractor?

Accepted Answer

Most lenders say no. Owner-builder loans exist but are rare and carry stricter requirements.

Question 3

What happens if my build goes over budget?

Accepted Answer

You cover overruns out of pocket. The loan amount is fixed at closing — lenders won't increase it mid-build.

Question 4

Do I pay interest during construction?

Accepted Answer

Yes. You pay interest-only on drawn funds during the build phase. Full principal and interest begin after conversion.

Question 5

Will fire hazard zoning affect my loan in Clearlake?

Accepted Answer

It can. Some lenders won't finance builds in high fire severity zones. Insurance requirements also increase significantly.

Question 6

How long does a construction loan term last?

Accepted Answer

Build phases typically run 12 months. Extensions are possible but cost money and require lender approval.

Construction Loans in Clearlake, CA