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Construction Loans in Duarte
Duarte sits at the base of the San Gabriel Mountains with older ranch homes and flat lots ideal for teardown-rebuild projects. Many buyers here want custom homes but face limited inventory of turnkey properties.
Construction financing lets you build exactly what you want instead of competing for the few remodeled listings. Most Duarte projects involve either ground-up builds on cleared lots or major renovations to existing structures that exceed what a 203(k) loan covers.
Lenders want 680+ credit and 20-25% down for construction loans. You need detailed builder contracts, architectural plans, and a realistic timeline before anyone commits funds.
Your debt-to-income ratio gets calculated on the future mortgage payment, not just the construction loan. If you own the lot free and clear, some lenders use its appraised value as part of your down payment contribution.
Regional banks dominate construction lending in LA County because they understand local builder reputations and permit timelines. National lenders typically avoid these loans—too much variability and risk compared to purchase mortgages.
One-time-close construction loans convert to permanent financing automatically when the build finishes. Two-close loans require separate applications and closings, which means you pay closing costs twice but get more rate flexibility.
Half my Duarte construction deals involve buyers who already own the lot. The other half are purchasing tear-downs where the land value far exceeds the existing structure's worth.
Budget 6-9 months for permits in LA County even on straightforward projects. Lenders fund in stages as inspections pass, so your builder needs financial cushion to avoid work stoppages between draws.
I tell clients to add 15% to their contractor's estimate for contingencies. Cost overruns kill more construction projects than anything else, and lenders won't increase your loan amount mid-build without a full reapproval.
Bridge loans work when you need to buy the lot fast and secure construction financing later. Hard money covers builders with sub-680 credit or rushed timelines, but rates run 9-12% versus 7-8% for bank construction loans.
If your project costs push past conforming limits after completion, you need a lender comfortable with jumbo construction—not every bank offers this. Conventional loans only work for finished properties, not active builds.
Duarte's hillside lots near the mountain face stricter grading and drainage requirements that add permit complexity. Flat parcels south of Huntington Drive move faster through city approvals.
Water connection fees and utility hookups cost more than buyers expect in this area. Get firm quotes from Duarte Public Works before finalizing your construction budget—lenders want these documented.
Some Duarte neighborhoods have covenant restrictions limiting architectural styles or minimum square footage. Your title company should flag these before you commit to plans your builder can't legally execute.
Plan 45-60 days from application to approval. Lenders review your builder's license, plans, and budget line-by-line before committing.
Some lenders allow owner-builders with proven construction experience. Most require a licensed GC with errors and omissions insurance to protect the loan.
You cover overages with cash—lenders won't increase the loan amount. This is why a 15% contingency fund is critical before breaking ground.
You pay interest only on funds drawn from the construction loan. Full principal and interest payments start when the loan converts to permanent financing.
Yes, if the scope exceeds FHA 203(k) limits or you need more flexibility. Lenders treat gut rehabs similar to new construction with staged funding.
Mortgage financing for independent contractors and freelancers who earn 1099 income instead of traditional W-2 wages.
Mortgage programs that allow borrowers to qualify based on liquid assets rather than traditional employment income.
Non-QM loans that use 12 to 24 months of bank statements to verify income for self-employed borrowers.
Short-term financing that bridges the gap between buying a new property and selling an existing one.
Debt Service Coverage Ratio loans that qualify investors based on a rental property's income rather than personal income.
Mortgage programs designed for non-US citizens and non-permanent residents who want to purchase property in the United States.
Asset-based short-term loans primarily used by real estate investors for property acquisition and renovation projects.
Mortgages that allow borrowers to pay only the interest for an initial period, resulting in lower monthly payments upfront.
Financing solutions tailored for real estate investors purchasing rental properties, fix-and-flip projects, or investment portfolios.
Home loans for borrowers who have an Individual Taxpayer Identification Number instead of a Social Security number.
Adjustable rate mortgages held in a lender's portfolio rather than sold on the secondary market, offering more flexible terms.
Non-QM mortgages that use a CPA-prepared profit and loss statement to verify income for self-employed borrowers.
Home loans with interest rates that adjust periodically based on market conditions after an initial fixed-rate period.
Specialized mortgage programs designed to support homeownership in underserved communities with flexible qualification criteria.
Mortgages that meet the guidelines and loan limits set by Fannie Mae and Freddie Mac for secondary market purchase.
Traditional mortgage financing not backed by a government agency, offering flexible terms and competitive rates for qualified borrowers.
Innovative loan products that leverage projected home equity growth to provide favorable financing terms.
Government-insured mortgages from the Federal Housing Administration with low down payments and flexible credit requirements.
A revolving line of credit secured by your home equity that allows you to borrow funds as needed during a draw period.
A fixed-rate second mortgage that provides a lump sum of cash by borrowing against the equity built in your home.
Mortgages that exceed the conforming loan limits set by the FHFA, designed for financing high-value luxury properties.
Loans for homeowners aged 62 and older that convert home equity into cash without requiring monthly mortgage payments.
Government-backed zero down payment mortgages for eligible rural and suburban homebuyers who meet income limits.
Government-guaranteed mortgages for eligible veterans, active-duty service members, and surviving spouses with zero down payment.