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Novato offers the rare combination of developable land and Marin County appeal. Custom builds here attract buyers seeking space without the commute penalty of outer Bay Area suburbs.
Construction financing in this market requires lenders comfortable with Marin's strict building codes and environmental review processes. Not every construction lender works well here.
Construction Loans in Novato
Most construction loans require 20-25% down, 680+ credit, and detailed build plans with contractor bids. Lenders fund in draws as construction progresses, not upfront.
You'll need a licensed contractor, itemized budget, and realistic timeline. Self-employed borrowers often qualify but need two years of tax returns showing strong income.
Local decision guide
Use this guide to connect construction loans eligibility, lender expectations, and local market factors before comparing payment options in Novato.
Novato offers the rare combination of developable land and Marin County appeal. Custom builds here attract buyers seeking space without the commute penalty of outer Bay Area suburbs.
Construction financing in this market requires lenders comfortable with Marin's strict building codes and environmental review processes. Not every construction lender works well here.
Most construction loans require 20-25% down, 680+ credit, and detailed build plans with contractor bids. Lenders fund in draws as construction progresses, not upfront.
Construction loans come from specialized lenders, not your typical retail bank. The best construction lenders fund in phases and convert to permanent financing without a second closing.
One-time-close construction loans save money but require lenders who underwrite both the construction phase and permanent loan upfront. We access lenders who specialize in California builds.
Novato builds take longer than you think. Marin permitting often adds 3-6 months to timelines. Build that into your budget because construction loan interest accrues during delays.
I tell clients to overestimate costs by 15% for Novato projects. Between environmental studies, fire safety upgrades, and Marin's labor costs, budgets run over more often than under.
Bridge loans work for buying land then securing construction financing later. That two-loan approach costs more in fees but gives flexibility if plans aren't finalized yet.
Jumbo loans become the end loan for Novato builds over conforming limits. Hard money works for quick land acquisition when you need speed over rate.
Novato sits in a high fire severity zone for insurance purposes. That affects both construction insurance during the build and homeowners insurance after completion.
Water and sewer capacity questions come up on certain parcels. Lenders want confirmation of utilities before funding, which sometimes requires engineering reports upfront.
Expect 45-60 days once you have approved plans and contractor bids. Lenders review your build budget line by line before committing funds.
Most construction lenders require a licensed general contractor. Owner-builder loans exist but come with higher rates and bigger down payments.
You fund overruns out of pocket. Lenders base the loan on appraised as-completed value, and they won't increase funding mid-project.
Yes, if you use a one-time-close loan. The lender finances both land acquisition and construction, converting to permanent financing when the home is complete.
Lenders inspect progress at each phase and release funds based on completion percentages. Typical draws occur at foundation, framing, drywall, and final completion stages.