Question 1

How much do I need to put down on a construction loan in Los Angeles?

Accepted Answer

Most lenders require 20–25% down on construction loans. On a $600,000 project, that's $120,000–$150,000. Some portfolio lenders go as low as 15% for strong borrowers with proven contractors, but expect tighter terms.

Question 2

Do I pay interest during construction?

Accepted Answer

Yes. You pay interest-only on the funded amount each month as work progresses. Once construction finishes and you refinance into a permanent loan, you'll start paying principal and interest on the full loan amount.

Question 3

What credit score do I need for a construction loan?

Accepted Answer

Most lenders want 700+ FICO. Some portfolio lenders will go to 680 if you have strong reserves and a proven contractor. Below 680, construction financing becomes very difficult in Los Angeles.

Question 4

How long does a construction loan take from approval to completion?

Accepted Answer

Closing takes 4–6 weeks. Construction itself runs 6–12 months depending on project scope. Then you refinance into a permanent loan, adding another 3–4 weeks. Total timeline is typically 10–16 months from approval to permanent financing.

Question 5

Can I use a construction loan to build on land I already own?

Accepted Answer

Yes. You'll need a clear title report and proof of ownership. If the land has a mortgage, the construction lender will require a subordination agreement from your current lender. Get title work done early—lenders won't move without it.

Construction Loans in Los Angeles: Build Your Custom Home