The Gist
Construction Financing Gist
Build Plans, Budget, and Lender Fit
Understand draw schedules, contingency reserves, and construction-to-perm conversion — before the first shovel.
5 Blinks~12 minutesFree
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Blink 01 · 3 min
Construction-to-Perm vs. Stand-Alone: Two Paths to Build
One closing or two — and why it changes your cost structure
“Construction financing comes in two structures: construction-to-permanent (one closing that converts to a mortgage) and stand-alone construction (a separate construction loan that requires a second closing for permanent financing). Each has distinct cost, risk, and flexibility profiles.”
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Blink 02 · 3 min
Draw Schedules: How Construction Loans Actually Work
You don't get the money all at once — here's the process
“Construction loans disburse funds in staged draws tied to completed construction milestones. You only pay interest on the amount drawn — not the full loan amount — which keeps costs manageable during the build phase.”
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Blink 03 · 2 min
Contingency Reserves: The Budget Buffer You Can't Skip
Why 10-15% contingency isn't conservative — it's realistic
“Construction projects virtually always encounter unexpected costs — material price changes, site conditions, design modifications, and code requirements. A 10-15% contingency reserve isn't padding — it's essential project insurance that most lenders require.”
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Blink 04 · 2 min
Builder Approval and the Lender-Builder Relationship
Your lender needs to approve your builder — here's what they check
“Construction lenders don't just qualify you — they qualify your builder. The builder's license, insurance, financial stability, and track record are all scrutinized because the lender is betting that your builder will actually complete the home.”
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Blink 05 · 2 min
VA and FHA Construction: Government-Backed Building
Zero-down new construction is possible — with the right program
“VA and FHA both offer construction-to-permanent loans that bring government-backed benefits — zero down (VA), low down payment (FHA), and competitive rates — to new construction. Availability varies by lender, but the products exist and are powerful.”
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