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Davis is at a crossroads. Measure V passed in June 2026, opening Village Farms for new housing development. Builders and buyers are moving fast to capitalize on the expansion.
Construction loans let you finance the build itself, not just the finished home. You pay interest only during construction, then convert to a permanent mortgage when the home is complete.
680
Minimum FICO
15–25%
Down Payment Range
60–90 days
Timeline to First Draw
$88,818
County Median Income
Construction Loans in Davis
Construction loans require solid credit — typically 680 FICO minimum, though 700+ is preferred. Down payments run 15% to 25% depending on the builder and lender.
Yolo County's median household income is $88,818. That income supports homes in the $500,000 to $650,000 range comfortably. Construction loans work best when you have equity or savings to cover the down payment.
Local decision guide
Use this guide to connect construction loans eligibility, lender expectations, and local market factors before comparing payment options in Davis.
Davis is at a crossroads. Measure V passed in June 2026, opening Village Farms for new housing development. Builders and buyers are moving fast to capitalize on the expansion.
Construction loans let you finance the build itself, not just the finished home. You pay interest only during construction, then convert to a permanent mortgage when the home is complete.
Construction loans require solid credit — typically 680 FICO minimum, though 700+ is preferred. Down payments run 15% to 25% depending on the builder and lender.
Construction lending is tighter than permanent mortgages. Lenders want to see builder experience, detailed plans, and a clear exit strategy to permanent financing.
Most California lenders require a pre-approval for the permanent loan before funding construction. The process takes longer — typically 60 to 90 days from application to first draw.
Construction loans make sense in Davis right now because Measure V just opened land. If you're building with an established builder, the lender risk is lower and rates stay competitive.
They don't work if you're buying an existing home. Stick with a conventional or FHA loan for resale properties — construction loans are only for new builds.
Construction loans differ from permanent mortgages in timing and payment structure. You pay interest-only during building, then refinance into a fixed-rate loan when the home is done.
A conventional purchase loan assumes the home exists. Construction loans assume it doesn't — the lender funds draws as work progresses, and you don't make principal payments until completion.
Village Farms Davis is a 1,275-acre development designed for younger families and first-time buyers. The project addresses Davis's housing shortage directly, with homes planned across multiple price points.
The California Honey Festival in nearby Woodland showcases the region's agricultural heritage. That kind of community investment signals long-term stability for new homeowners in the area.
Construction lending in California is growing as new developments open. Fannie Mae and Freddie Mac recently expanded their appetite for homebuilder construction loans, signaling confidence in the sector.
Davis benefits from this trend. With Village Farms approved and other infill projects moving forward, lenders are actively competing for construction business in the county.
Construction loans fund the build in phases and carry interest-only payments. Permanent loans start after completion with full principal and interest payments. Most construction loans convert to permanent mortgages at the end.
Yes. Lenders require permanent loan pre-approval before releasing construction funds. This shows the builder and lender you can actually close when the home is done.
From application to first draw typically takes 60 to 90 days. The full construction phase depends on the builder's timeline, usually 12 to 18 months for a single-family home.
Yes, if you're building new on approved land like Village Farms. Construction loans don't work for existing homes — use conventional or FHA for resale properties instead.
Most lenders require 680 FICO minimum, though 700 or higher is preferred. Strong credit improves your rate and approval odds significantly.