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Maywood's tight housing stock makes construction loans a smart play for buyers who can't find what they need. Building new or gutting an existing property often beats competing for turnkey homes.
Most Maywood construction deals involve major renovations on older properties or ADU builds. Ground-up new construction is rare given lot sizes and zoning, but renovation-to-permanent loans are common.
You need 680+ credit and 20-25% down for most construction loans. Lenders want reserves covering 6-12 months of payments since you're managing a build, not just buying a finished house.
Construction loans require detailed plans, contractor bids, and builder credentials upfront. If you're doing a renovation conversion, expect an appraisal based on after-repair value, not current condition.
Big banks rarely touch construction loans under $500K. You're better off with regional lenders or credit unions that understand Los Angeles County renovation projects and won't balk at Maywood addresses.
Construction-to-permanent loans roll your construction financing into a standard mortgage after the build wraps. This beats getting separate construction and permanent loans, which means two sets of closing costs and rate resets.
Most Maywood borrowers underestimate how much lenders scrutinize contractor choice. Your builder needs proper licensing, insurance, and a track record lenders can verify. Hiring your cousin who flips houses won't fly.
Draw schedules determine when you get construction funds. Lenders release money in stages as work completes, not upfront. Budget for carrying costs between draws since contractors often need payment before lenders inspect and release the next tranche.
Hard money loans close faster but cost 9-12% rates versus 7-8% for construction loans. Use hard money only if you need to close in two weeks or your credit blocks conventional construction financing.
FHA 203(k) renovation loans work for smaller projects under $100K but cap at FHA loan limits. Construction loans handle bigger renovations and new builds without the red tape of FHA draws and inspections.
Maywood sits entirely within one square mile with older housing stock from the 1940s-1960s. Most construction loans here finance foundation work, electrical upgrades, and layout reconfigurations that old homes need.
Permit timelines in Los Angeles County run 3-6 months for major projects. Factor this into your construction loan timeline since most lenders won't fund draws until permits are pulled and inspections pass.
Expect 20-25% down for most construction loans. Lenders view construction as higher risk than buying finished homes, so lower down payments are rare.
Plan for 4-6 weeks minimum. Lenders need time to review plans, vet your contractor, and order the appraisal based on projected completed value.
Some lenders allow owner-builders if you have construction experience and proper licensing. Most require a licensed general contractor with verifiable Los Angeles County project history.
You need cash reserves to cover overruns. Lenders won't increase your loan mid-project, so budget 10-15% contingency for unexpected costs.
Yes, many lenders finance ADU construction as part of renovation loans. The ADU must meet Los Angeles County zoning and appraise with the main property.
Construction Loans in Maywood