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Construction Loans in Santa Clarita
Santa Clarita's remaining buildable lots make construction financing a real option here. Most borrowers use these loans for custom builds in Canyon Country or major renovations in older Valencia neighborhoods.
These loans work differently than purchase mortgages. You draw funds in stages as construction progresses, paying interest only during the build phase.
Rates typically run 1-2% higher than conventional mortgages during construction. Expect this — lenders take on more risk when there's no finished property to secure the loan.
Most construction lenders want 20-25% down. Your credit score needs to hit 680 minimum, though 720+ gets better terms.
You'll need detailed construction plans, a licensed contractor, and a realistic budget. Lenders verify every line item before approving draws.
Debt-to-income ratios matter more here than on purchase loans. Lenders calculate based on your future payment, not just construction interest.
Self-employed borrowers face tougher scrutiny. Two years of tax returns and strong reserves help offset lender concerns about income stability during a build.
Local credit unions often beat big banks on construction rates here. They understand Santa Clarita's building codes and contractor networks better.
Some lenders offer single-close construction-to-permanent loans. You lock your rate once, then convert to a standard mortgage when the build finishes.
Portfolio lenders give you more flexibility on unconventional projects. If you're building something unique or using non-traditional methods, they're your best shot.
Most lenders cap construction timelines at 12 months. Projects that drag past that trigger rate adjustments or require refinancing.
Builder experience matters as much as your credit score. Lenders scrutinize your contractor's track record and license status before approving anything.
Budget padding saves deals. Add 10-15% contingency to your construction estimate — lenders respect borrowers who plan for overruns.
The appraisal happens twice: once on proposed value before construction, again when finished. If the completed appraisal comes in low, you're stuck covering the gap.
We see fewer construction loans during rate spikes. When money costs more, the interest-only phase gets expensive fast.
Bridge loans work for major renovations if you own the property free and clear. Construction loans make more sense when you're building from dirt.
Hard money covers deals traditional lenders reject — shorter timelines, riskier projects, or borrowers with credit issues. You'll pay 8-12% rates for that flexibility.
Conventional loans only work after construction finishes. If you're buying new construction from a builder, you'll use standard financing at closing.
Jumbo construction loans follow similar rules but require larger reserves. Lenders want to see 12+ months of payments in the bank before approving seven-figure builds.
Santa Clarita's building permits take 6-12 weeks typically. Factor this into your construction timeline before locking rates.
HOA restrictions in planned communities limit what you can build. Valencia and Stevenson Ranch have strict architectural review boards that slow approvals.
Fire-resistant building requirements add costs here. Budget for these mandates — lenders verify compliance before releasing final draws.
Water and utility hookups can surprise borrowers in rural areas. Canyon Country lots sometimes need expensive infrastructure work that standard construction budgets miss.
Lenders inspect progress at each stage and release funds accordingly. You typically get 4-6 draws tied to foundation, framing, drywall, and completion milestones.
Some lenders allow owner-builders if you have construction experience and proper licensing. Most require professional contractors with local track records.
You'll need to cover overruns out of pocket. Lenders won't increase loan amounts mid-construction unless the appraisal supports higher value.
Not during construction. If you convert to a conventional loan with less than 20% equity at completion, PMI applies then.
Expect 45-60 days from application to funding. Plan reviews and contractor verification take longer than standard purchase approvals.
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.