Question 1

How long does a construction loan last in Santa Maria?

Accepted Answer

Most run 12-18 months for the construction phase. You make interest-only payments during the build, then convert to a standard mortgage when the home is complete and gets its certificate of occupancy.

Question 2

Can I act as my own general contractor?

Accepted Answer

Some lenders allow owner-builder arrangements if you prove construction experience and pull proper permits. Most require licensed general contractors with Santa Barbara County project history and proper insurance.

Question 3

What happens if construction costs exceed the original budget?

Accepted Answer

You cover overruns with cash or request a loan modification if the finished home appraises higher. Lenders don't automatically increase loan amounts mid-construction. Budget conservatively from the start.

Question 4

Do construction loans work for major renovations?

Accepted Answer

Yes. Construction-to-permanent loans fund both ground-up builds and substantial renovations requiring permits. You need detailed plans, contractor bids, and enough equity or down payment to meet loan-to-value limits.

Question 5

How do lenders disburse construction loan funds?

Accepted Answer

Funds release in scheduled draws tied to construction milestones like foundation, framing, and roof completion. An inspector verifies each phase before the lender releases the next draw to your contractor.

Construction Loans in Santa Maria: Finance Your Ground-Up Build or Major Renovation