Question 1

How does a construction loan work in Merced?

Accepted Answer

You draw funds in stages as your build progresses. At completion, the loan converts to a permanent mortgage.

Question 2

Can I use land I already own as a down payment?

Accepted Answer

Yes. Equity in your lot can count toward the required down payment. Your lender will order an appraisal to confirm value.

Question 3

What credit score do I need for a construction loan?

Accepted Answer

Most lenders want 680 or higher. A stronger score gets you better terms and more lender options.

Question 4

Do construction loans have higher rates than regular mortgages?

Accepted Answer

Typically yes — construction is riskier for lenders. Rates vary by borrower profile and market conditions.

Question 5

What is a one-time-close construction loan?

Accepted Answer

It combines your construction financing and permanent mortgage into one loan. You avoid a second closing and second set of closing costs.

Question 6

How long does a construction loan last in Merced County?

Accepted Answer

Most terms run 12 months. Merced County permit delays can affect timelines, so build in buffer with your lender.

Construction Loans in Merced, CA — Build What You Can't Buy