New Construction Loans
New Construction Loans are a type of loan that is available to investors looking to acquire land and/or build new properties. These loans have the highest requirements for borrower experience, which means lenders for this loan product will be asked to provide information about prior new construction experience. New construction loans typically offer more longer terms than fix and flip loans and often require a larger downpayment
In addition, New Construction loans can be used to acquire and develop the land on which the property will be built, New Construction loans have flexible credit requirements, which can help borrowers with less-than-perfect credit still qualify to build new construction. Overall, New Construction loans provide a funding benefit to those who have the experience and desire to build wealth by building new homes
New Construction Loan Characteristics
1) New Construction Loans are available to investors that have some degree of experience in new construction or a sufficient downpayment to offset the risk in the case of lack of experience.
2) These loans can be used to acquire land and hire a General Contractor to complete the construction
3) New Construction loans provide construction payments in the form of periodic draws based on the ongoing completion of the new construction.
4) New Construction loans typically offer longer terms and similar interest rates as compared to fix and flip loans
5) New Construction loans require building plans and specific budgets, borrowers must have a specific vision for their new construction project.
6) New Construction loans have flexible credit requirements, which can help borrowers with less-than-perfect credit but useful experience still qualify for funding
7) New Construction loans can be used to build a variety of property types, including single-family homes, multi-unit properties, and condominiums
8) New Construction allow for options for different types of construction, including new single family homes, townhomes, condos, or Additional Dwelling Units.
5) VA loans do not require mortgage insurance, which can save borrowers money on their monthly payments
6) VA loans have flexible credit requirements, which can help borrowers with less-than-perfect credit still qualify for a mortgage
7) VA loans can be used to purchase a variety of property types, including single-family homes, multi-unit properties, and condominiums
8) VA loans allow for options for refinancing, including streamline refinancing and cash-out refinancing, which can help borrowers lower their monthly mortgage payments or access equity in their home.
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