Question 1

How does a construction loan work in San Jose?

Accepted Answer

Funds release in draws as construction milestones are hit. At completion, the loan converts to a permanent mortgage.

Question 2

Can I use a construction loan for an ADU?

Accepted Answer

Yes. ADU construction financing is available and popular in San Jose. Loan structure depends on whether you own the land outright.

Question 3

What credit score do I need for a construction loan?

Accepted Answer

Most programs require 680 or higher. Dropping below that narrows your options significantly and raises your rate.

Question 4

Do I pay a mortgage during construction?

Accepted Answer

You pay interest only on drawn funds during the build phase. Full payments start when the loan converts at completion.

Question 5

What is a one-time close construction loan?

Accepted Answer

One loan covers both the build and permanent financing. You lock terms upfront and avoid a second closing after completion.

Question 6

How long does a construction loan last in California?

Accepted Answer

Most construction periods run 12-18 months. Extensions are possible but may trigger fees or rate adjustments.

Construction Loans in San Jose, CA