New Construction Loans

Where others see a plot of dirt, you see the home of your dreams. Perhaps you even see the perfect neighborhood to meet your community’s unique needs. You’ve made the plans — let us fund your potential. A new construction mortgage can help builders and investors secure up to 90% of their construction project costs for single family or multi-family properties.

New Construction Loans are especially attractive to…

  • Buyers with no real estate experience who want to build a customized home.
  • Developers who want to build 1-5 units at a time from the ground up.
  • Experienced large volume investors looking to develop 5-20 multi-family properties.

Loan Features

  • Up to 90% of costs

    Funding is available for up to 95% of construction costs.

  • Land Advances

    Borrowers can fund up to 75% of the land value for land that is developed to use.

  • No real estate experience needed

    Single property loans available for borrowers without real estate experience.

  • Exposure limits available

    Experienced investors and builders can be approved for a maximum exposure limit to fund multiple projects at one time.

  • Funding from $150K – $2.5MM

    A wide range of funding available for single family and multi-family properties alike.

  • 90 days minimum interest

    Keep project costs affordable by only paying interest for the first 90 days.

Frequently Asked Questions

Are all New Construction Loans the same?

Just as you wouldn’t expect every contractor or home inspector to be the same, building loan lenders also vary. Who you work with matters. Contact an FOA Commercial representative today to learn how we can help you overcome traditional funding hassles and get you on your way to building dream homes and real estate wealth.

What is the minimum credit score required for a New Construction Loan?

Currently, the minimum score required is 620. Keep in mind that construction loan rates and maximum funding limits are based on a borrower’s creditworthiness. Generally, a better score along with other markers of creditworthiness can help a borrower get better construction loan interest rates and a higher funding amount.

How do I get approved for a New Construction Loan?

New build mortgages are subject to approval based off the borrower’s financial information, as well as the scope of the project. Approval depends on a borrower’s experience, credit score, liquid assets, and net worth. Loan approval also relies on the project’s appraisal value, geographic location, and other underwriting criteria. Loan amounts vary based on loan type, loan-to-value (LTV), the borrower’s creditworthiness, and other risk-based factors.

What experience do I need to secure a New Construction Loan?

For borrowers with no real estate experience, single loans are available, capped at 80% of Loan-to-Cost (LTC). Builders and developers will need to have completed one or more flips in the past two years to qualify for a New Construction exposure limit. Borrowers are also subject to approval based on liquid assets, net worth, and FICO score.

What property types am I allowed to build?

New Construction loans can fund the acquisition and improvement of non-owner-occupied single-family properties, up to 20 multi-family properties, 2-4 family units, and townhouses. This loan is ineligible for condo property types.

What if I want to fix and flip a property?

Fixing and flipping properties can be a wonderful investment opportunity, and we encourage applying for our Exposure Limit, which allows you to do both Fix & Flip and New Construction loans.

Do you calculate LTV or LTC?

The Loan-to-Value (LTV) ratio is based on market value, whereas the Loan-to-Cost (LTC) ratio is calculated based on construction costs. Generally, we use the lesser of the two calculations to determine maximum loan funding.

Can I get FOA's New Construction Loan in my area?

Finance of America Mortgage’s commercial loans are available in most states. However, this product is not available in Alaska, North Dakota, South Dakota, Utah or Vermont.

Why Finance of America Mortgage?

We’re not about pushing loan papers. We’re about moving your dream forward. And we do that through knowledgeable local advisors, a personal approach, and a variety of smart loan options.

Learn More About Why Finance of America Mortgage?

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