Construction loans provide short-term mortgage financing to fund the building phase of a residential property. These loans cover construction costs through scheduled disbursements and may convert into a permanent mortgage once the project is completed.
Structured draws • Interest-only payments • One-time or two-step financing
A construction loan is a short-term mortgage designed to finance the building of a new home. Unlike traditional mortgages, funds are not released upfront. Instead, they are disbursed in phases as construction milestones are completed and inspected.
Construction loans are typically used when:
| Item | Details |
|---|---|
| Minimum Down Payment | ~20% |
| Interest Rates | Generally 1–5% higher than traditional mortgages |
| Payment Structure | Interest-only during construction |
| Rate Lock | Available on construction-to-permanent loans |
| Insurance | Homeowner’s & builder’s risk insurance required |
Funds are released as construction progresses, subject to inspection:
Foundation and initial framing
Major systems installation
Interior construction
Exterior finishing
Final inspection and completion
(Actual draw schedules vary by lender and project.)
Construction loans require careful structuring, documentation review, and coordination with builders and inspectors. At Loans by Kelly, we guide borrowers through the lending side of the construction process with clarity and precision.
We support clients across multiple states, with service available in English, Portuguese, and Spanish.
Whether you’re financing a custom build or transitioning from construction to permanent financing, Loans by Kelly helps you navigate the process with confidence.
3 Simple Steps to Get Pre-Approved with Confidence
We begin with a quick conversation to understand your goals, review your financial situation, and identify the best loan options for you.
We match you with the right loan option, whether you’re a first-time homebuyer, investor, self-employed borrower, or using alternative documentation.
Submit your application and receive a fast, no-obligation pre-approval, so you can move forward with confidence.
