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Monterey's coastal terrain makes new construction complex. Lots are scarce, regulations are strict, and build costs run high.
A construction loan finances the build phase. It converts to a permanent mortgage when your home is complete.
680+
Min Credit Score
20-25%
Down Payment
12 months typical
Loan Term
Required
Builder Approval
Interest only
During Build
Construction Loans in Monterey
Most lenders want a 680+ credit score for construction loans. Some require 700 or higher.
Expect a 20-25% down payment. Lenders see construction as higher risk than a finished home.
Local decision guide
Use this guide to connect construction loans eligibility, lender expectations, and local market factors before comparing payment options in Monterey.
Monterey's coastal terrain makes new construction complex. Lots are scarce, regulations are strict, and build costs run high.
A construction loan finances the build phase. It converts to a permanent mortgage when your home is complete.
Most lenders want a 680+ credit score for construction loans. Some require 700 or higher.
Not every lender does construction loans. Many banks skip them entirely. You need a lender who actually understands build timelines.
We work with 200+ wholesale lenders. Several specialize in construction-to-permanent programs for California coastal projects.
Monterey County permitting is slow. Build timelines stretch longer than inland areas. Your loan term needs to account for that.
Get your builder approved early. Lenders review contractor licenses, insurance, and financials before they approve your loan.
Bridge loans work if you own land and need short-term capital fast. Construction loans are structured for longer timelines.
Hard money moves quicker but costs more. If your project qualifies for conventional construction financing, take it.
Monterey County has strict environmental review requirements. Coastal Commission oversight can add months to a project.
Build costs near the coast are well above state averages. Material delivery, labor, and soil conditions all add up fast.
The lender releases funds in draws as each build phase completes. You pay interest only during construction, then convert to a permanent mortgage.
Yes. Many construction loans cover land purchase and build costs together. Your lender will underwrite the full project value.
Most lenders require 680 or higher. Some programs in Monterey's higher-cost range require 700+.
Typically 12 months. Monterey projects often need extensions due to permitting delays — ask about that upfront.
Yes. Lenders require a licensed, insured general contractor. They review the builder's credentials before approving your loan.
Cost overruns come out of pocket. Lenders fund only up to the approved amount — build in a contingency reserve.