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El Cajon sits in San Diego's East County — an area where buildable lots still exist. That makes construction lending relevant here in ways it isn't in more built-out coastal cities.
Building new in El Cajon means you control the floor plan, finishes, and timeline. A construction loan funds the build, then converts to a permanent mortgage when you move in.
680+
Min Credit Score
20-25%
Typical Down Payment
Up to 12 months
Build Period
Licensed & Insured
Contractor Requirement
Construction Loans in El Cajon
Construction loans are harder to qualify for than standard purchase loans. Lenders want a 680+ credit score, a solid debt-to-income ratio, and a licensed general contractor lined up before they approve anything.
Down payments typically run 20-25%. You'll also need approved plans, a construction budget, and a signed builder contract. Lenders want to see the whole project before they fund a single draw.
Local decision guide
Use this guide to connect construction loans eligibility, lender expectations, and local market factors before comparing payment options in El Cajon.
El Cajon sits in San Diego's East County — an area where buildable lots still exist. That makes construction lending relevant here in ways it isn't in more built-out coastal cities.
Building new in El Cajon means you control the floor plan, finishes, and timeline. A construction loan funds the build, then converts to a permanent mortgage when you move in.
Construction loans are harder to qualify for than standard purchase loans. Lenders want a 680+ credit score, a solid debt-to-income ratio, and a licensed general contractor lined up before they approve anything.
Most retail banks offer construction loans, but their guidelines are rigid. Wholesale lenders we work with have more flexibility on lot types, builder approvals, and draw schedules.
Not every lender does construction-to-permanent loans. Some only do stand-alone construction loans, which means you'd refinance into a new mortgage after the build. That costs more in fees.
The biggest mistake I see: borrowers find a lot, sign with a builder, then try to get financing. Get approved first. Lenders need to review the builder's credentials and your plans before committing.
Interest during construction is charged only on drawn funds — not the full loan amount. That keeps your carrying costs lower while the home gets built. Lock in your permanent rate at the start if you can.
If you already own a lot free and clear, a construction loan is your clearest path. If you're buying a fixer-upper, a renovation loan like an FHA 203k or conventional rehab loan may be simpler.
Hard money construction loans exist for borrowers who don't qualify conventionally. Rates are higher, but they fund faster and have looser requirements. Rates vary by borrower profile and market conditions.
El Cajon is in a high-fire-hazard area in parts of the city. Lenders will require fire insurance, and some will scrutinize lot location carefully. Address this early — it can slow approvals.
San Diego County permitting timelines can stretch your build schedule. Build buffer time into your construction loan term. Most lenders offer 12-month construction periods with extension options.
Most lenders won't allow it. They require a licensed third-party GC. A few portfolio lenders make exceptions for experienced owner-builders.
The lender releases funds in stages tied to completed work. An inspector verifies each phase before the next draw is released.
You cover the overage out of pocket. Lenders don't increase the loan mid-build, so accurate cost estimates upfront are critical.
Yes. Some construction-to-permanent loans include lot acquisition. The lot often needs to be purchased before or rolled into the construction loan at closing.
The construction phase is typically variable. The permanent phase can convert to a fixed rate. Terms vary by lender.
Expect 30-60 days. Plan review and builder credentialing add time vs. a standard purchase loan.