Question 1

How does a construction loan work in Watsonville?

Accepted Answer

The lender funds your build in stages called draws. At completion, the loan converts to a standard mortgage.

Question 2

Can I use a construction loan on agricultural land?

Accepted Answer

Only if the parcel is zoned residential. Watsonville has significant ag-zoned land — verify before applying.

Question 3

Do I pay a mortgage during the build?

Accepted Answer

You pay interest only on funds drawn during construction. Full payments start after the loan converts.

Question 4

How long does a construction loan term last?

Accepted Answer

Most construction phases run 6-12 months. Delays in Santa Cruz County permitting can push that longer.

Question 5

What if my build costs go over budget?

Accepted Answer

Lenders fund only up to the approved amount. Cost overruns come out of your pocket — budget a contingency reserve.

Question 6

Can I act as my own general contractor?

Accepted Answer

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

Construction Loans in Watsonville, CA