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Lemon Grove sits in San Diego County, where the median household income of $102,285 supports active new construction and renovation projects.
Construction loans differ from traditional mortgages. You draw funds in stages as work progresses, not all at closing. Interest accrues only on the amount you've drawn, keeping early costs lower.
700+
Minimum FICO
20% of project cost
Typical Down Payment
45–60 days
Time to Initial Close
$1,104,000
2026 Conforming Limit
Construction Loans in Lemon Grove
Construction loans require solid credit and a detailed project plan. Most lenders want 700+ FICO and 20% down on the total project cost. You'll need architectural plans, contractor bids, and a realistic timeline before approval.
The 2026 conforming limit for San Diego County is $1,104,000. Construction projects above that threshold move into jumbo territory, which tightens underwriting and typically requires 25% down.
Local decision guide
Use this guide to connect construction loans eligibility, lender expectations, and local market factors before comparing payment options in Lemon Grove.
Lemon Grove sits in San Diego County, where the median household income of $102,285 supports active new construction and renovation projects.
Construction loans differ from traditional mortgages. You draw funds in stages as work progresses, not all at closing. Interest accrues only on the amount you've drawn, keeping early costs lower.
Construction loans require solid credit and a detailed project plan. Most lenders want 700+ FICO and 20% down on the total project cost. You'll need architectural plans, contractor bids, and a realistic timeline before approval.
Construction lending in California is narrower than purchase or refinance lending. Fewer lenders offer it, and those who do apply stricter overlays. Retail banks often refer construction deals to portfolio lenders or specialized construction shops.
The process takes longer than a standard mortgage. Underwriting includes contractor review, appraisal of the finished property, and periodic inspections during the build.
Construction loans make sense in Lemon Grove when you have a clear vision and a solid contractor. If you're buying an existing home, a traditional purchase mortgage is simpler and faster.
The real advantage appears in the numbers. You pay interest only on the drawn balance during construction, not on the full loan amount. On a $600,000 project with 20% down, that's meaningful savings over 12–18 months of building.
A purchase mortgage closes in 30 days and funds the entire price at once. A construction loan closes slower, funds in stages, and converts to a permanent mortgage when the build is done.
Construction loans carry more documentation and inspection requirements. You'll submit progress photos, contractor invoices, and appraisals of the finished property.
Lemon Grove's proximity to San Diego's job centers makes it attractive for custom home builders. The area offers land availability and reasonable lot costs compared to central San Diego, drawing builders and owner-builders who want more space for their money.
San Diego County's building permit process is straightforward, though timelines vary by municipality. Working with a local contractor familiar with Lemon Grove's requirements and inspectors speeds the construction phase and reduces delays.
Most lenders require 20% down on the total project cost. If your project exceeds the $1,104,000 conforming limit, expect 25% down. Your down payment covers land, plans, and initial construction costs.
Interest accrues only on the amount you've drawn. During the building phase, you pay interest-only on each draw. Once construction finishes and the loan converts to a permanent mortgage, you begin principal and interest payments.
700+ FICO is the typical floor. Some lenders go to 680 with compensating factors like strong income or significant reserves. Construction lending is tighter than purchase lending, so a higher score improves your options.
Initial closing takes 45–60 days. Underwriting includes contractor review, appraisals, and detailed project plans. Conversion to permanent financing happens 30 days after the build is complete.
Yes. The lender will appraise the land and the finished home value. You'll still need 20% down on the total project cost, but that can include the land's current value as part of your equity.