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Sacramento's housing inventory stays tight. Building from scratch gives you control that resale shopping doesn't.
Construction loans fund the build, then convert to a permanent mortgage. One project, two loan phases.
680–720
Min Credit Score
20–25%
Down Payment
12 Months
Typical Loan Term
Required
Builder Approval
Varies by lender
Rate Type
Most lenders want a 680+ credit score for construction loans. Some require 720. This is stricter than conventional purchase loans.
Expect a 20-25% down payment. Lenders see construction risk differently than a finished home purchase.
Few retail banks actively do construction loans. Portfolio lenders and regional banks are your real options here.
We work with 200+ wholesale lenders. That reach matters when fewer lenders offer this product statewide.
Your builder's track record affects your approval. Lenders vet the contractor, not just the borrower.
Draw schedules matter. Funds release in stages as construction hits milestones — budget your timeline carefully.
A bridge loan gets you to the next property fast. A construction loan funds a multi-month build — very different tools.
Hard money moves quicker but costs more. Construction loans from traditional lenders have better long-term rates.
Sacramento County permitting timelines vary by municipality. Factor city permit delays into your draw schedule.
Areas like Elk Grove and Rancho Cordova still have buildable lots. Closer-in Sacramento neighborhoods have fewer options.
You draw funds in stages as your home is built. After completion, the loan converts to a permanent mortgage.
Most lenders require 680 minimum. Some push to 720 depending on the loan size and lender guidelines.
Yes, major renovation projects can qualify. The scope must typically meet a lender's minimum improvement threshold.
Plan on 20-25% down. Construction lending carries more risk, so lenders require more skin in the game.
Yes. Lenders vet your contractor's license, insurance, and track record before approving the loan.
Most terms run 12 months. If your build runs long, you may need an extension — plan for that possibility.
Construction Loans in Sacramento