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Morgan Hill's tech-fueled growth is reshaping Santa Clara County. OpenAI's massive Mountain View expansion signals sustained demand for housing near major employers.
New construction in this market typically runs $1.2 million to $1.4 million. Construction financing works in phases — you draw funds as work progresses, paying interest only on what's been disbursed.
700+ FICO
Minimum Credit Score
20–25% of project cost
Typical Down Payment
60–90 days
Approval Timeline
$159,674
County Median Income
Construction Loans in Morgan Hill
Construction loans require stronger credit than purchase mortgages — typically 700+ FICO and 20% to 25% down. Lenders want to see solid reserves and a detailed construction budget.
Your builder's reputation and the project's timeline matter as much as your credit score. Lenders review the construction contract, timeline, and builder experience before approving the loan.
Local decision guide
Use this guide to connect construction loans eligibility, lender expectations, and local market factors before comparing payment options in Morgan Hill.
Morgan Hill's tech-fueled growth is reshaping Santa Clara County. OpenAI's massive Mountain View expansion signals sustained demand for housing near major employers.
New construction in this market typically runs $1.2 million to $1.4 million. Construction financing works in phases — you draw funds as work progresses, paying interest only on what's been disbursed.
Construction loans require stronger credit than purchase mortgages — typically 700+ FICO and 20% to 25% down. Lenders want to see solid reserves and a detailed construction budget.
Construction lending in California is tighter than purchase lending. Most lenders require a relationship with your builder or proof of their track record.
Broker-sourced construction loans often come with more flexibility on builder approval and timeline adjustments. Expect to pay an appraisal fee, construction inspection fees, and a higher interest rate during the build phase.
Construction loans make sense in Morgan Hill when you've found the right lot and builder. The market's tight inventory of move-in-ready homes means custom building often costs less than buying resale.
They don't make sense if you need to close in 60 days or if your builder lacks lender approval. Construction lending requires patience and a solid relationship with your builder.
Construction loans versus a bridge loan: construction financing lets you pay interest-only during the build. A bridge loan lets you buy your new lot while selling your current home, but you carry two mortgages briefly.
Versus a home equity line of credit: a HELOC is faster to close and more flexible on draws. But it's only available if you own a home with equity. Construction loans work for first-time builders or those without existing equity to tap.
Silicon Valley's Lunar New Year celebration in Santa Clara drew over 200 vendors and a two-day parade. That cultural energy reflects the region's diversity and economic strength.
Asia Live's new two-story food emporium at Westfield Valley Fair signals retail and dining investment in the county. When major retailers and restaurants expand, it's a sign of sustained economic confidence.
Typically 20% to 25% of the total project cost. Lenders want to see meaningful skin in the game. Some builders offer incentives that reduce your out-of-pocket, but the lender still requires the full percentage of the construction budget.
No — you pay interest-only on the amount drawn so far. If your builder has drawn $400,000 of a $1,200,000 project, you pay interest only on that $400,000. At completion, you refinance to a standard mortgage and begin principal-and-interest payments.
You'll need to cover the overage out of pocket or request a loan modification. Lenders rarely increase the loan amount mid-build. A contingency fund of 10% above the builder's estimate protects you from surprises.
Plan for 60 to 90 days from application to first draw. The lender reviews your credit, finances, the construction contract, and the builder's track record. Faster timelines are possible with strong credit and an approved builder.
Yes — most lenders offer 120 to 180-day rate locks that cover the typical construction window. If your build runs longer, you may need to extend the lock, which could cost points or a higher rate.