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Folsom is one of Sacramento County's most active new-build markets. Demand for custom homes runs high here, and construction loans are how most of those deals get done.
Building in Folsom means working with city permits, grading requirements, and contractors who stay busy. Your financing has to move at the same pace — or you lose your lot.
680+
Min Credit Score
20–25%
Typical Down Payment
Yes
GC License Required
12–18 months
Typical Build Term
Construction Loans in Folsom
Construction loans have tighter requirements than standard mortgages. Most lenders want a 680+ credit score, 20-25% down, and a licensed general contractor on the project.
You also need approved plans and a detailed construction budget before most lenders will commit. Incomplete draw schedules kill deals before they start.
Local decision guide
Use this guide to connect construction loans eligibility, lender expectations, and local market factors before comparing payment options in Folsom.
Folsom is one of Sacramento County's most active new-build markets. Demand for custom homes runs high here, and construction loans are how most of those deals get done.
Building in Folsom means working with city permits, grading requirements, and contractors who stay busy. Your financing has to move at the same pace — or you lose your lot.
Construction loans have tighter requirements than standard mortgages. Most lenders want a 680+ credit score, 20-25% down, and a licensed general contractor on the project.
Most retail banks offer construction loans — but their guidelines are rigid and their turn times are slow. That's a real problem when your builder has a start date.
Through our wholesale network, we access lenders who specialize in construction lending. They understand draw schedules, inspections, and builder timelines better than a general bank does.
The biggest mistake I see: borrowers lock in a lender before finalizing their plans. Then the budget changes and the loan falls apart. Get your numbers tight first.
One-time close construction loans — where your build loan converts to a permanent mortgage automatically — save you a second round of closing costs. Not every lender offers them. We find ones that do.
A bridge loan can fund land purchase and early costs, but it's short-term and expensive. Construction loans are purpose-built for the full build cycle.
Hard money moves faster but carries higher rates and short terms. For a custom build in Folsom that takes 10-14 months, a construction-to-permanent loan is almost always the better structure.
Folsom sits in a high fire-hazard zone in parts of the city. That affects insurance costs during construction — and lenders require builder's risk coverage before funding starts.
Sacramento County has specific grading and drainage rules for hillside lots common in East Folsom. Factor those costs into your budget before you submit to a lender.
The lender funds your build in draws as each phase completes. At the end, the loan converts to a standard mortgage.
Yes. Most lenders require a licensed GC with verifiable experience. Owner-builder loans exist but are harder to find.
Most lenders want 680 or higher. Some specialty lenders go lower, but expect tighter terms. Rates vary by borrower profile and market conditions.
Plan for 20-25% down on the total project cost. That includes land, materials, and labor — not just the finished home value.
Some lenders offer rate locks through completion. Others float during the build. This is one of the key differences between lenders we shop.
It combines the build loan and permanent mortgage into one closing. You save on fees and avoid requalifying after the home is finished.