Question 1

Can I act as my own general contractor on a construction loan?

Accepted Answer

Most lenders require licensed contractors with liability insurance. Owner-builder programs exist but need significant construction experience and higher down payments.

Question 2

What happens if construction costs exceed the original budget?

Accepted Answer

You'll need to cover overages out of pocket or reduce scope. Lenders won't increase loan amounts mid-project without new appraisals showing higher value.

Question 3

How do construction loan rates compare to regular mortgages?

Accepted Answer

Construction phase rates run 0.5-1% higher than permanent mortgages. Once you convert to permanent financing, rates match standard loan programs.

Question 4

Do I need to own the land before applying for construction financing?

Accepted Answer

No. Construction loans can include land purchase in the total project cost. Lenders prefer you control the land through purchase contract before approval.

Question 5

What permits does Sutter County require before construction funding?

Accepted Answer

You need building permits approved and fees paid before first draw. Grading, septic, and well permits must also be secured for rural builds.

Construction Loans in Yuba City: Build Your Custom Home in Sutter County