Question 1

How much do I need down for a Santa Rosa construction loan?

Accepted Answer

Most lenders require 20-25% down. That percentage applies to the total project cost—land purchase plus construction budget combined.

Question 2

Can I act as my own general contractor to save money?

Accepted Answer

Some lenders allow owner-builder construction loans if you have prior building experience and can show comparable projects. Most require a licensed general contractor.

Question 3

What happens if construction costs exceed my loan amount?

Accepted Answer

You pay overruns out of pocket before the lender releases final draw funds. Budget 10% cushion above your contract price to cover these situations.

Question 4

How do construction loan interest rates compare to regular mortgages?

Accepted Answer

Construction phase rates run 0.5-1% higher than permanent mortgage rates. Your rate converts to standard mortgage pricing once construction completes.

Question 5

What if my builder goes out of business mid-project?

Accepted Answer

Your lender holds back enough funds to complete the work with a new contractor. Completion bonds protect against this scenario on larger projects.

Question 6

Do Santa Rosa construction loans cover land purchase?

Accepted Answer

Yes. Most construction loans include land acquisition if you're buying and building simultaneously. You need 20-25% down on the combined land and construction costs.

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