Features of Construction Loans
One-Time-Close Financing
Finance construction and your permanent mortgage in one loan, no need for a second closing.
Interest-Only During Construction
Make interest-only payments while your home is being built.
Streamlined Process
Simple draw process with a smooth transition from construction to permanent financing.
SECURE YOUR HOMEOWNERSHIP
Why Rely on Sistar Mortgage?
When it comes to building your dream home, Sistar Mortgage has you covered with our comprehensive construction loans program. Our experienced team of construction mortgage lenders understands the unique needs of home construction financing. We offer flexible amortization options and consider individual borrower criteria. With the ability to extend loans when necessary, we ensure a smooth and seamless construction process. Our expert guidance and support extend to working directly with contractors to facilitate efficient development. Choose Sistar Mortgage for reliable construction financing and turn your vision into a reality with confidence.
Who Can Benefit From Construction Loans?
Sistar Mortgage's construction loans cater to aspiring homeowners, renovators, real estate investors, and developers, providing flexible financing options for building, renovating, and developing properties with expert guidance and support.
Homebuyers
Prospective buyers seeking to construct their dream home can benefit from construction loans for customized financing solutions.
Homeowners
Existing homeowners planning extensive renovations or home expansions can access construction loans for their projects.
Real Estate Developers
Construction loans are advantageous for developers, providing the necessary funds to construct residential or commercial properties.
Contractors and Builders
Construction loans benefit contractors and builders, facilitating seamless project financing for their clients' construction endeavors.
Fueling Your Home Buying Journey
Set Up Your Loan Process In A Few Minutes
Provide Information
To provide optimal options, we first learn a little about you and your home-buying objectives.
Credit Review Process
You need genuine numbers if you want sellers to trust you. Receiving permission depends on your credit score.
Determine Financial Capabilities
Provide information about your income, regular expenses, and housing savings. Our mortgage lenders for refinancing will figure out your house's maximum price.
Create a Proposal
You may quickly alter your permission letter so sellers won't be aware if you submit an offer lower than what you've been authorized for.
Flexibility
Adaptable financing solutions designed to meet unique homebuilding needs, combining construction and permanent financing into one streamlined loan.
Progress
Funds disbursed in stages aligned with construction milestones, keeping the process simple and structured from start to finish.
Convenience
One-time-close structure means no multiple closings, no repeated paperwork, and no requalification, a simpler financing experience overall.
Transition
Once construction is complete, your loan automatically converts to a permanent mortgage, no second appraisal or additional closing required.
Other Available Loan Options
Discover additional loan options offered by Sistar Mortgage. Explore our array of loan options, including FHA, VA, Jumbo, and more. Our expert team will guide you towards the perfect fit.
What Our Clients Have To
Say About Us!
“I felt Sistar Mortgage was an excellent fit for me. When they went through the procedure and gave me the specifics, the staff was kind and patient with me. The loan officer was kind, considerate, and thorough in his contacts.”
Ethan H
Great Experience
“They have excellent loan officers who educated me about loans. They’re extremely helpful in obtaining the best financing for us and getting us approved and ready to buy. Many thanks to Sistar Mortgage and Team!”
Benjamin Cooper
Team of Professionals
“We thoroughly recommend Sistar Mortgage’s loan officer and loan processor. Begin the mortgage lenders for refinancing. They made the loan application procedure simple.The process was as easy-going as we could have hoped. I appreciate everything.”
Olivia Miller
Highly Recommended
Frequently Asked Questions
A construction loan is short-term financing used to cover the costs of building a new home from the ground up. Unlike a traditional mortgage, funds are disbursed in stages (called 'draws') as construction milestones are completed.
During construction, you typically pay interest only on the amount drawn. Once construction is complete, the loan converts to, or is replaced by, a permanent mortgage.
A construction-to-permanent loan (also called a one-time close or OTC loan) combines the construction phase and permanent mortgage into a single loan with one closing, saving time and closing costs.
A stand-alone construction loan (two-time close) is a separate short-term loan that is paid off and replaced by a separate permanent mortgage after construction. One-time close offers convenience; two-time close may offer more flexibility.
Most lenders require a minimum credit score of 680 for construction loans, with many preferring 720 or higher. Because construction loans carry more risk than standard mortgages, given the extended timeline and involvement of contractors, lenders apply stricter underwriting standards. Some government-backed construction programs (like FHA or VA construction loans) allow lower scores.
Construction loans typically require 20–25% down, based on the total project cost (land + construction). Some one-time close programs allow lower down payments, FHA construction-to-permanent loans may allow as little as 3.5% down, and VA construction loans offer 0% down for eligible veterans. Your down payment may be partially satisfied by land equity if you already own the lot.
Construction funds are released in scheduled draws tied to completed construction phases, such as foundation, framing, rough-in, drywall, and completion. Before each draw, a lender-ordered inspection verifies that the work was completed. Funds go to the builder or contractor, not directly to you. This protects both you and the lender.
If your construction costs exceed the approved loan amount, you are responsible for covering the difference out of pocket. Lenders will not approve additional funds beyond the agreed loan amount. This is why a detailed, well-researched contractor bid and a contingency reserve (typically 10–15% of project costs) are essential before starting.
Some lenders allow owner-builder loans, but they are harder to qualify for and often require proof of significant construction experience. Most traditional and institutional lenders require a licensed general contractor. Owner-builder programs exist but are less common and may require a larger down payment or lower LTV.
Construction loans typically have terms of 12 to 18 months, enough time to complete most residential builds. If construction is delayed and the loan term expires, an extension may be available (often for a fee). For one-time close loans, the permanent mortgage term begins automatically upon construction completion.
A One-Time-Close (OTC) construction loan combines the construction phase and the permanent mortgage into a single loan with one closing. This saves time, reduces closing costs, and eliminates the need for requalification when construction is complete.
We offer both Conventional and Jumbo construction loans to fit a range of project sizes and borrower profiles.
Our construction loan program covers stick-built and modular homes for primary residences and secondary homes.
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