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Construction Loans in Gustine
Gustine offers vacant land and teardown opportunities that attract builders looking for affordable construction projects. Most borrowers here use construction-to-permanent loans to avoid double closings and minimize upfront costs.
We see steady demand from families building custom homes and investors developing spec properties in Merced County. Construction financing works differently than purchase loans—expect more scrutiny on builder credentials and project timelines.
You need 680+ credit and 20% down minimum for most construction loans. Lenders will review your builder's license, insurance, and track record before approving the project.
Cash reserves matter more here than with purchase loans. Expect to show 6-12 months of reserves covering both construction and permanent loan payments.
Not all lenders handle construction loans—many avoid them due to draw inspection requirements and timeline risks. We work with lenders who specialize in California construction projects and understand local building codes.
Draw schedules vary by lender. Some release funds in 4-5 stages based on completion percentages, while others use fixed monthly draws tied to inspection approval.
Most Gustine construction loans convert to conventional or jumbo permanent mortgages once building completes. Lock your permanent rate early—construction phases typically run 8-12 months, and rate changes during that window can hurt.
Your builder relationship determines approval speed. Lenders prefer contractors with completed projects in Merced County and clean permit histories. First-time builders face tougher underwriting.
Hard money loans work for quick land acquisition, but construction loans offer better rates for the build phase. Bridge loans help if you're selling an existing home while building your next one.
Once construction finishes, your loan converts to a conventional or jumbo mortgage. That conversion happens automatically with construction-to-permanent programs—no second application or closing costs.
Merced County building permits typically process faster than Bay Area counties, but budget extra time for inspections. Lenders account for rural inspection scheduling when setting draw release timelines.
Well and septic requirements affect construction budgets and loan amounts in unincorporated areas. Your lender will order appraisals on both land value and completed project value before approval.
Most lenders require 20% down on the total project cost, including land and building expenses. Stronger credit and builder relationships can sometimes reduce this to 15%.
Some lenders allow owner-builders, but most require licensed contractors with verifiable completion histories. Owner-builder loans carry higher rates and larger down payments.
Your lender can extend the construction phase, but rate lock extensions cost money. Budget 2-3 extra months beyond your builder's timeline to avoid expensive surprises.
Yes, renovation construction loans fund gut rehabs and additions. Lenders require detailed scopes of work and contractor bids before approval.
Lenders release funds in stages based on inspection-verified completion percentages. Typical draws happen at foundation, framing, rough-in, drywall, and final completion.
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.