Question 1

How does a construction loan work in Arroyo Grande?

Accepted Answer

You draw funds in stages as construction milestones are completed. Each draw requires an inspection before the next release.

Question 2

What credit score do I need for a construction loan?

Accepted Answer

Most lenders want 680 or higher. Some programs go lower, but expect a larger down payment requirement.

Question 3

Can I be my own general contractor?

Accepted Answer

Rarely. Most lenders require a licensed third-party contractor. Owner-builder programs exist but are hard to find in California.

Question 4

How long does a construction loan term last?

Accepted Answer

Typically 12 months. SLO County builds often need 18 months due to permitting — confirm your lender allows extensions.

Question 5

What is a one-time-close construction loan?

Accepted Answer

It combines the construction phase and permanent mortgage into one loan. You close once, lock your rate, and avoid re-qualifying after the build.

Question 6

Do I pay interest during construction?

Accepted Answer

Yes. You pay interest only on drawn funds during the build phase. Full principal and interest payments start after conversion.

Construction Loans in Arroyo Grande, CA