Loan Options
Construction Loans
One-Time Close & Custom Home Financing
At Secured Lending Group, we provide flexible residential construction financing to turn your architectural plans into reality. Whether you are breaking ground on a custom home, purchasing land and building simultaneously, or adding an Accessory Dwelling Unit (ADU) in California, our construction-to-permanent loan programs streamline the financing process from groundbreaking to move-in day.
One-Time Close vs. Two-Time Close Construction Loans
Navigating construction financing starts with selecting the right loan structure. We prioritize single-close financing to protect you from market volatility and unnecessary fees.
| Loan Feature | One-Time Close (Single-Close) | Two-Time Close (Traditional Construction) |
| Closing Costs | Paid once at initial closing | Paid twice (separate build loan & mortgage) |
| Interest Rate Risk | Rate is locked before construction begins | Floating rate; must qualify for current rates at finish |
| Underwriting & Appraisal | Single approval based on “subject-to-completion” value | Re-qualified and re-appraised after home is built |
| Perm Loan Transition | Automatic conversion to permanent mortgage | Requires full refinance and second closing |
| Best For | Borrowers wanting rate security and lower out-of-pocket costs | Complex multi-phase builds requiring changing plans |
Financing the Land: Lot Purchase vs. Land Equity
Whether you already own acreage or have just found the ideal parcel, our programs accommodate both scenarios:
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Buying the Lot and Building Together: Roll the land purchase and the construction costs into one loan. Your down payment is calculated from the total combined cost of the land plus the build budget.
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Using Existing Land Equity as Your Down Payment: If you already own your lot, the equity you hold in that land can be credited directly toward your required construction down payment. In many cases, if you have owned the land long enough or have substantial equity, you may not need to bring any additional cash to the closing table.
How the Construction Phase Works: Draws & Interest-Only Payments
A construction loan functions differently than a standard purchase mortgage. You do not receive the full loan balance at once, nor do you pay full principal and interest while the home is being built.
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The Draw Schedule: Loan proceeds are placed in an escrow account and disbursed to your licensed general contractor in stages (draws) as predetermined milestones are completed (e.g., foundation, framing, rough mechanicals, drywall, interior finishes).
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Independent Inspections: Before each draw is released, a certified third-party inspector verifies the work has been completed according to code and project specifications.
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Interest-Only Payments on Drawn Funds: During the 12- to 18-month build window, you only make monthly interest payments on the money that has actually been disbursed—not the total approved loan balance. This keeps your monthly carrying costs manageable while you may still be paying rent or an existing mortgage.
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Permanent Mortgage Conversion: Once the city or county issues the final Certificate of Occupancy (COO), the loan automatically converts into your permanent 15- or 30-year fixed loan without a secondary loan closing.
California Specialty Programs: ADUs and Jumbo Builds
Given the unique real estate landscape in California and the Western states, Secured Lending Group offers tailored construction products designed for high-value properties and expanding housing needs.
Key Benefits
1. Accessory Dwelling Unit (ADU) Financing
Maximize your lot’s potential by building a detached ADU, attached guest suite, or garage conversion.
Finance up to 100% of construction costs through equity-based construction loans.
Utilize projected future rental income from the ADU to help qualify for financing.
Increase your overall property value while establishing passive monthly cash flow.
2. Jumbo Construction Loans
In high-cost markets across Southern California (San Diego, Orange County, Los Angeles) and Arizona, building a custom home frequently exceeds conforming loan limits. We offer Jumbo construction-to-permanent financing up to $3M+, providing high-leverage solutions with flexible debt-to-income allowances for prime custom residences.
3. Major Renovation & Rehabilitation Loans
If you own or want to buy an existing home that needs extensive structural overhaul, our renovation loans (including Fannie Mae HomeStyle and FHA 203k programs) let you finance the purchase price and remodeling budget into a single mortgage based on the completed future value.
Requirements at a glance
Requirement
What it means
Borrower Financials:
Full income verification (W-2s, 1040s, or alternative P&L/Bank Statement programs for self-employed borrowers), liquid asset reserves (typically 6–12 months of PITI), and a minimum 680 FICO score.
Builder Verification:
Your builder must be a licensed, bonded, and insured General Contractor with a proven track record. Lenders review the builder's credit, references, resume, and general liability insurance.
Project Specifications:
A signed fixed-price construction contract, detailed architectural plans, line-item budget, and a clear project timeline.
Common Questions
Down payment requirements typically range between 10% and 20% of the total acquisition and build cost. If you already own the land, your accumulated equity in the property can often be credited toward this requirement, reducing or eliminating the need for out-of-pocket cash.
Most conventional one-time close programs require a third-party, licensed general contractor to manage the build. However, experienced licensed contractors building their own personal residence may qualify through specialized portfolio or Non-QM construction loan programs.
Standard residential construction-to-permanent loans grant a construction window of 12 to 18 months. Extensions may be granted under specific circumstances involving permit delays or unforeseen supply chain disruptions.
Lenders require a contingency reserve (typically 5% to 10% of the hard construction costs) built into the initial loan budget to absorb cost overruns, material price increases, or unexpected change orders.
At a glance
Loan Structure:
One-Time Close (C-to-P) or Two-Time Close options.
Eligible Build Types:
Ground-up custom builds, major home renovations, modular homes, and detached ADUs.
Down Payment:
Down Payment:
Minimum Credit Score:
680 to 720 FICO
Loan Amounts:
Conforming limits up to $3,000,000+ for Jumbo construction projects
Belinda Biedebach
NMLS #1556597
Don’t let financing delays stall your project. Whether you are drafting initial architectural blueprints or preparing to break ground, Belinda Biedebach and the team at Secured Lending Group will structure the right construction-to-permanent loan for your timeline and budget.
See what you qualify for
Pre-approval takes about ten minutes online and comes back within a day. No cost, no obligation, no effect on your credit score to find out.