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Construction Loans in Palmdale
Palmdale offers more buildable land than most LA County cities, making construction loans viable for buyers who can't find what they want. The Antelope Valley's open space attracts builders planning custom homes and investors renovating older properties.
Construction financing here typically runs 12-18 months before converting to permanent financing. Expect lenders to scrutinize your builder's track record and require detailed cost breakdowns before funding draws.
Most construction lenders want 680+ credit and 20% down on the total project cost—not just land. That means if you're building a $500K home on $100K land, you need $120K down, not $20K.
You'll submit builder bids, architectural plans, and a project timeline. Lenders fund in stages as work completes, not upfront. Cash reserves covering 6-12 months of payments are standard requirements.
Local credit unions often handle construction loans better than big banks in Palmdale. They understand Antelope Valley builders and approve faster. National lenders bring better rates but slower underwriting.
One-time-close construction loans combine building and permanent financing in a single approval. Two-time-close loans require separate applications but offer more flexibility if plans change mid-build.
Most Palmdale construction deals fail during the builder vetting phase. Lenders reject contractors without proper licensing, insurance, or completion history. Get your builder pre-qualified before signing contracts.
Renovation loans through FHA 203k or Fannie Mae HomeStyle work better than pure construction loans if you're updating an existing property. Lower down payments and simpler approval for projects under $100K.
Bridge loans fund faster but cost more—use them only if you need quick cash to secure land before construction financing closes. Hard money works for projects traditional lenders reject, like spec builds without presales.
Conventional loans can't fund construction but become your takeout financing after completion. Jumbo construction loans apply if your project exceeds conforming limits, requiring 25-30% down instead of 20%.
Palmdale permitting runs 4-8 weeks for standard builds. Factor this into your construction timeline since lenders won't fund draws until permits are active. City inspections at each build stage trigger the next payment release.
Wind and seismic requirements add costs to Palmdale construction that coastal buyers don't face. Lenders factor these into feasibility reviews. Your builder's familiarity with local codes affects approval odds significantly.
Most lenders require licensed general contractors with completion history. Owner-builder programs exist but need substantial construction experience and higher down payments, typically 25-30%.
Lenders release funds in stages after inspecting completed work—foundation, framing, mechanical, final. You pay interest only on disbursed amounts, not the full loan until construction finishes.
You cover overruns out of pocket or halt construction. Lenders won't increase approved amounts mid-build, which is why accurate initial bids and 10-15% contingency reserves matter.
One-time-close loans lock your end rate at approval, protecting against increases during your 12-18 month build. Two-time-close loans refinance at current rates when construction completes.
You pay interest only on drawn funds monthly. Full principal and interest payments start when construction completes and the loan converts to permanent financing.
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.