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New Construction

New Construction Loans for Homes Being Built in Delaware and Pennsylvania

Financing a house that does not exist yet works nothing like buying one that does. The loan funds in stages, the appraisal is based on plans, and the timeline belongs to the builder.

Talk through a build timeline 302-600-3197

A new construction loan advances money in scheduled draws as the house gets built, rather than handing over a lump sum at closing. An appraiser values the property from the plans, specifications, and lot, and the lender approves a budget against that projected value. The builder then requests draws at agreed milestones: site work, foundation, framing, mechanicals, drywall, and final. Each request triggers an inspection before funds release, and you pay interest only on the balance drawn so far. When the local municipality issues the certificate of occupancy, the loan either converts automatically into a permanent mortgage or is paid off by one. Building in Kent County, Chester County, or anywhere with a slow permit office means the schedule matters as much as the rate, since a lender's construction window is a hard deadline.

Who it's for

  • Buyers building a custom home on a lot they own or are purchasing at the same closing
  • Families contracting with a licensed local builder who can supply plans, a fixed budget, and references
  • Borrowers comfortable carrying rent or a current mortgage alongside interest payments during the build
  • Buyers with enough cushion for change orders, since overages beyond the approved budget come out of pocket
  • Anyone unable to find existing inventory that fits, which is a common story across growing Delaware and Pennsylvania townships

Why choose this loan type

  • One closing and one set of fees when structured as construction to permanent, instead of paying twice
  • Interest only on drawn funds keeps the carrying cost low through the early months of the build
  • Draw inspections protect you as much as the lender, because money moves only after work is verified complete
  • Owned land can count as equity toward the down payment, sometimes covering most of the required contribution

Frequently asked

Do I make payments while the house is being built?+

You make interest only payments on the money actually drawn, not on the full approved amount. If the builder has only pulled the foundation and framing draws, you are paying interest on that slice alone. Payments climb as construction advances and then convert to a normal amortized payment once the certificate of occupancy is issued.

What is a one time close and why does it matter?+

A one time close funds the construction period and the permanent mortgage under a single closing and a single set of fees. The alternative is a standalone construction loan followed by a separate refinance, which means two applications, two appraisals, two sets of closing costs, and exposure to whatever rates do in the meantime.

Can I use my land as the down payment?+

Very often, yes. If the lot is already owned free and clear, its appraised value typically counts toward equity in the completed project. Buyers in Sussex County and the Pennsylvania countryside who bought acreage years ago sometimes find they need very little additional cash to start building.

Start a construction file

Bring the lot details, the builder's contract, and the plan set. We'll map the draw schedule against your permanent financing options.

Apply for a Purchase Apply for a Refinance

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