Question 1

What credit score do I need for a construction loan in Chowchilla?

Accepted Answer

Most lenders require 680 minimum, though some portfolio lenders go to 660 with larger down payments. Expect tougher standards than a standard purchase loan.

Question 2

How does construction loan funding work during the build?

Accepted Answer

Lenders disburse funds in stages as work completes, verified by inspections. You typically pay interest-only during construction, then convert to principal and interest when the home is done.

Question 3

Can I act as my own general contractor to save money?

Accepted Answer

Some lenders allow owner-builder arrangements, but most require licensed general contractors. Portfolio lenders are more flexible if you have documented construction experience.

Question 4

What happens if construction runs over budget?

Accepted Answer

You'll need cash reserves to cover overruns since lenders only fund the approved loan amount. Budget 10-15% contingency beyond your contracted costs.

Question 5

How long does construction loan approval take?

Accepted Answer

Expect 45-60 days from application to closing. Lenders review plans, verify builders, and order appraisals on the future completed value, which takes longer than purchase loans.

Construction Loans in Chowchilla — Build Custom in Madera County