Construction Loans


Construction loans are what make home customization possible and allow the borrower the unique opportunity to be actively involved with the construction or remodel of their home from start to finish.

The most important step is to understand the lender approval process.



The first step in acquiring a construction loan is to determine your finances. Speak to a NOVA® Home Loans Loan Officer and go through your personal finances, together. Take into account your current household income and savings as well as the purchase price of the property. The Loan Officer will begin the process by reviewing your credit and get you pre-qualified for a construction loan. There are two types of construction loans to choose from, and your NOVA® Loan Officer will help you find the perfect loan.


A TWO-TIME-CLOSE loan covers the construction phase of the home while the second covers your mortgage. Both loans contain separate fees and interest charges.


The ONE-TIME-CLOSE loan allows you to underwrite the entire project at once with only one closing fee. You are also in full control of your own loan. You will make interest only payments on any withdrawn amounts during the construction phase. Once the home is completed and the home goes through a final walkthrough and inspection, then the loan turns into a single fixed rate mortgage.



Not to worry! Most of the required documents will be provided by the architect, contractor or homebuilder. Your lender will also be able to guide you and your preferred builder in completing some of these requirements:


    • Architectural plans for appraisal (If any, for both the plot and the site) signed off by borrower and builder

    • Contractor’s IRS Certification

    • Copies of the list of materials needed as well as a total cost estimate (signed by builder/architect)

    • Details of purchase with legal description of property

    • Septic/well reports and permits

    • Any additional permits and licenses

    • Course of Construction Insurance (The builder’s risk policy that provides insurance coverage for the build during the construction phase.)

    • Building Permit

    • Any other forms the lender may deem necessary to proceed with loan

    • Any training courses required in order to originate a loan



YES, VERY! Communication with your contractor is key! The lender, the building contractor and you will need to be well informed of the status of the home build project. Clauses in the loans allow for different payments based on percentage of completion. If these thresholds are not met but are required for the build to proceed, then the funds could end up being out of pocket. If this happens, you may qualify for a reimbursement. It is important to stay well-informed and involved at all stages of the home build project.



  • Start by making an appointment with a NOVA® Mortgage Loan Officer.

  • Do your research - familiarize yourself with the area, reach out to soil technicians if needed

  • Interview with architects, contractors and builders – yes, you can even ask for references! They all want your project!

  • Determine the best type of loan for you with your Nova® Loan Officer.


The experts at NOVA ® Home Loans can help you finance the home of your dreams. Visit with a NOVA® Loan Officer to start building your one of a kind home, today!



  • As an added bonus, Loan Officers are likely already familiar with architects, builders, contractors, designers and landscapers and may be able to help you connect with the teams you will need to make your dream home a reality.

  • Construction loans may also be the most appropriate choice for extensive remodeling projects because in most cases, they provide the owner with more money that can be accessed from the home's equity through a Cash-Out Refinance.

The information contained here is educational only. Other conditions and restrictions may apply. Rates and available programs are subject to change without notice. Contact your loan officer for more information.