Financing
Understanding construction-to-permanent financing.
Building on your lot requires different financing than buying a finished home. Here's what you need to know about construction-perm loans, budget ranges, and working with lenders who understand the on-your-lot build process.
Start With Firm Numbers
Lenders need accurate numbers—and so do you. Before you approach a lender, we help you lock in your plan and a detailed, site-specific budget through our design process, so you borrow against real costs instead of a guess.
Once your plan and budget are set, you're ready to seek financing with realistic expectations. Here's how the loan side works.
How Construction-Perm Loans Work
Most on-your-lot builds use a construction-to-permanent loan (often called a "one-time close" loan). This combines construction financing and your long-term mortgage into a single loan, which means:
- One closing instead of two (saves time and closing costs)
- One set of closing costs instead of paying twice
- Rate lock protection during construction (typically 12-18 months)
- Automatic conversion to permanent mortgage when construction completes
During Construction:
You make interest-only payments on funds already drawn. The lender releases money in scheduled "draws" as work progresses. An inspector verifies completion before each draw.
Typical draw schedule: foundation, framing, dried-in, mechanicals, finishes, final
After Construction: Loan converts to a standard 15- or 30-year mortgage with monthly payments that include principal and interest. No refinancing needed.
Budget Components
A complete on-your-lot budget includes more than just the house. Plans are priced, but site work is the variable that changes dramatically by lot.
Land Costs
- Purchase price (if not already owned)
- Survey and title work: $1,500–$3,000
- Soil tests and perc testing: $800–$2,500
Site Preparation (The Variable)
- Clearing and grading: $5,000–$40,000+ (depends on terrain, tree removal, rock)
- Driveway installation: $3,000–$20,000+ (length, material, base requirements)
- Well and septic (if needed): $15,000–$35,000+ (depth, system type, field size)
- Utility connections: $2,000–$15,000 (distance from street, easements)
- Retaining walls or special drainage: varies significantly
- Erosion control and stormwater management: lot-specific
Plan Package & Modifications
- Base plan purchase: priced per plan
- Plan modifications or customizations: quoted during the design phase
- Structural engineering (if required): $1,500–$5,000
- Permit and plan review fees: $2,000–$8,000
House Construction
- Foundation: $25,000–$50,000
- Framing and structure: $40,000–$85,000
- Mechanical systems: $35,000–$65,000
- Interior finishes: $30,000–$75,000
- Exterior finishes: $15,000–$40,000
Example Budget Ranges (Northern Virginia):
These are rough ranges. Your design retainer process will produce an accurate budget based on your actual lot conditions and plan selection.
The CORELOT Financing Timeline
Plan & Budget Development
Before you talk to any lenders, we lock in the numbers during our design process:
- Review your lot conditions (topography, utilities, access)
- Finalize plan selection and any modifications
- Obtain site work estimates from our trade partners
- Build detailed line-item budget with contingencies
- Complete feasibility confirmation
Timeline: 2-3 weeks typically
Why This Protects You: You'll know the real cost before committing to a lender. Plans are priced; we're determining the site variables and any plan updates you need.
Lender Selection & Pre-Approval
Armed with your budget, you're ready to approach lenders. We provide builder credentials, construction timeline, budget breakdown, and comparable sales data for the appraiser.
Timeline: 2-4 weeks typically
Loan Commitment & Closing
Lender issues commitment, title prepares documents, and you close with your rate locked for the construction period.
Construction Draws
We notify the lender at each milestone (foundation, framing, mechanicals, finishes, final). Inspector verifies, funds release within 3-5 business days.
Conversion to Permanent
At completion, your loan automatically converts to a standard mortgage. No refinancing needed.
Trusted Lender Partners
We work with construction-perm specialists who understand on-your-lot builds and the CORELOT process. You're free to use any lender, but these partners have closed multiple projects with our clients:
Fairway Independent Mortgage
Contact information available upon request
Contact information available upon request
American Financing
Contact information available upon request
Union Home Mortgage
Contact information available upon request
Contact information available upon request
Each of these lenders understands the construction-to-permanent loan process, has worked with CORELOT builds before, and communicates clearly throughout the draw process.
We recommend contacting 2-3 lenders to compare rates, fees, and terms. They'll compete for your business, and you'll have confidence you're getting the best fit for your situation.
Common Questions
Why nail down my plan and budget before getting pre-approved?
Because pre-approval doesn't mean much without accurate numbers. If you get pre-approved for $400,000 but your actual project costs $475,000 due to site work, you've wasted time. Finalizing your plan and site budget first ensures you know real costs before involving lenders. See how our design process works.
Can I finance both land purchase and construction?
Yes. Construction-perm loans can include land acquisition if you don't already own the lot. The land purchase happens at closing, then construction begins.
What if my lot needs significant site work?
That's exactly what the design retainer uncovers. We'll get real estimates for clearing, grading, utilities, and access before you commit to anything. Site work is the variable—plans are priced.
What if I want to make plan modifications?
That's handled during the design phase. Any plan updates are priced upfront and included in your budget before you approach lenders. No surprises.
Do I need construction experience to qualify?
No. Lenders work with first-time builders regularly. Having an experienced licensed builder (CORELOT) and detailed plans actually strengthens your application.
How long does construction take?
Most CORELOT builds finish in 8-12 months from groundbreaking, depending on plan size and site conditions. Weather, permit timing, and material availability can affect schedules.
Ready to talk financing?
Schedule a consultation to review your lot, walk through construction-to-permanent options, and get connected with lenders who know on-your-lot builds.
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