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Arroyo Grande sits in one of California's most desirable coastal corridors. Inventory stays tight, so building new often makes more sense than waiting for the right listing.
San Luis Obispo County has strict zoning and permitting timelines. Factor that into your build schedule before you commit to a construction loan term.
680+
Min Credit Score
20%
Typical Down Payment
12–18 months
Typical Loan Term
Licensed & Approved
Builder Requirement
Interest Only on Draws
During Build
Construction Loans in Arroyo Grande
Construction loans are harder to qualify for than standard mortgages. Most lenders require a 680+ credit score, 20% down, and detailed builder contracts upfront.
You also need a licensed, approved builder. Lenders vet the contractor — not just you. A builder without proper documentation will kill the deal.
Local decision guide
Use this guide to connect construction loans eligibility, lender expectations, and local market factors before comparing payment options in Arroyo Grande.
Arroyo Grande sits in one of California's most desirable coastal corridors. Inventory stays tight, so building new often makes more sense than waiting for the right listing.
San Luis Obispo County has strict zoning and permitting timelines. Factor that into your build schedule before you commit to a construction loan term.
Construction loans are harder to qualify for than standard mortgages. Most lenders require a 680+ credit score, 20% down, and detailed builder contracts upfront.
Not every lender offers construction loans. Many banks that advertise them only do it for existing clients with large deposits on hand.
We work with 200+ wholesale lenders, and a small subset specialize in construction. Finding the right one for a San Luis Obispo County build takes real legwork.
The most common mistake I see: borrowers lock a construction loan before permits are approved. Delays push past the rate lock window and costs spike.
One-time-close construction loans roll the build and permanent mortgage into one closing. That saves you fees and removes re-qualification risk when the build finishes.
A bridge loan can fund a land purchase while you finalize plans. But bridge rates are higher and terms are short — usually 12 months or less.
Hard money moves faster but costs more. Construction loans from conventional lenders take longer to close but carry significantly lower rates. Rates vary by borrower profile and market conditions.
Arroyo Grande sits in a coastal zone with added environmental review requirements. Coastal Commission review can extend your pre-build timeline by six months or more.
Water and sewer connections in parts of SLO County have capacity constraints. Confirm availability early — this catches builders off guard more than anything else.
You draw funds in stages as construction milestones are completed. Each draw requires an inspection before the next release.
Most lenders want 680 or higher. Some programs go lower, but expect a larger down payment requirement.
Rarely. Most lenders require a licensed third-party contractor. Owner-builder programs exist but are hard to find in California.
Typically 12 months. SLO County builds often need 18 months due to permitting — confirm your lender allows extensions.
It combines the construction phase and permanent mortgage into one loan. You close once, lock your rate, and avoid re-qualifying after the build.
Yes. You pay interest only on drawn funds during the build phase. Full principal and interest payments start after conversion.