Construction Loan Options
Build or Buy? Discover Now.
Andrea Cooke shares helpful guidance on one of the biggest homebuying decisions: whether it makes more sense to build a new home or buy an existing one. She walks through key factors to consider so you can choose the path that fits your timeline, budget, and long-term plans.
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Construction Loans FAQs
A Construction-Only Loan provides short-term financing to build your home when you plan to pay off the loan after construction — often by selling your current home. You may be able to put as little as 5% down, make interest-only payments during the build, and skip mortgage insurance and escrows for taxes and homeowners insurance. Funds are released through flexible draw schedules with convenient online requests and direct disbursement to contractors. Loans are available for single-family, owner-occupied homes, with amounts up to $1 million and terms up to 12 months.
A Construction-to-Permanent Loan finances the build of your new home and then automatically converts to a permanent mortgage — all with just one closing. You avoid the cost and hassle of a second loan, can choose fixed or adjustable rates, and may lock in your permanent rate for up to 12 months to allow for longer build times. During construction, funds are released as work is completed, and you only pay interest on what’s been used. Options may include low down payments, programs without mortgage insurance, flexible draw schedules, online draw requests, and direct payments to contractors, with availability for primary homes, second homes, and select investment properties.
A Construction Renovation Loan helps you renovate the home you already own or purchase a fixer-upper and finance the improvements in one loan. It works like a construction-to-permanent mortgage, but instead of starting from scratch, your loan is based on an existing home and the upgrades you plan to make. You may be able to lock in your rate during renovation, make interest-only payments on funds as they’re used, and take advantage of low down payment options, flexible draw schedules, online draw requests, and direct payments to contractors. Loans are available for primary homes, second homes, and select investment properties, with options that may not require mortgage insurance.
A Fast Move Loan helps you buy a new home before your current one sells. You can use the equity in your existing home to cover your down payment and closing costs, then repay the loan once your home sells. Payments are interest-only for up to 12 months, and you may be able to borrow up to 85% of your home’s value when it’s listed or under agreement. This can help you avoid moving twice and lock in today’s mortgage rate, with loan amounts available up to $600,000.
A Lot Loan helps you purchase land now, even if you’re not ready to build yet. You may be able to put as little as 20% down on an improved lot — or 35% down on unimproved land — with loan options up to $600,000. Terms can include longer amortizations with fixed-rate options available, giving you time to plan your build at your own pace. An improved lot generally means utilities or private water and sewer are already in place.
A Flex-to-Fixed Construction Loan gives you more flexibility while you build or renovate your home — and more choice once it’s finished. You can lock in a fixed rate during the 12-month construction phase, then choose from multiple permanent loan options when your home is complete, all with one closing. Funds are released as work moves along, contractors can be paid directly, and there are no added loan costs when the loan converts. This option can be used for new builds or renovations, may offer higher financing amounts, and can be paired with our Fast Move Program if you’re selling your current home.
An E-Z Renovation Loan is a simpler way to pay for smaller home improvements without setting up a full construction loan. Renovation costs are held in an escrow account and released as the work is completed, making the process easier and faster. It can be used when buying or refinancing a home, may allow financing based on the home’s value after improvements, and gives you a short window to finish the work. Projects must be completed by a licensed contractor, and this option is available with select ENB mortgage programs.
