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The requirements for a construction loan do not differ significantly from the requirements for other “conventional” mortgages. You might be surprised to learn that building your family’s home, rather than buying, is closer to reality than you think. Many applicants who qualify for a purchase mortgage also qualify for a loan that will let them build their new home, whether they already own the land they intend to build on or not! 


Basic Requirements for a Construction Loan 

For applicants who want to know how to qualify for a construction loan, contacting a loan officer early for guidance and expertise is a great choice. Here are the basics: Just like purchases and refinances, your lender will require you to demonstrate your ability to repay the loan and to cover the costs of originating the mortgage. You might be asked to provide copies of your pay stubs, your tax returns, and your bank statements when you submit your application. This, in addition to performing a credit check, will be among the methods used to evaluate whether you qualify or not. 

According to Forbes, lenders associate construction loans with more risk than their other home loans, in part because of the money they could lose if the home is not completed. It’s likely you’ll encounter higher credit score and income requirements for a construction loan as a result. Don’t be deterred– a loan officer and your builder can help you calculate the loan amount that will help you build what you need. 


Can You Combine a Land and Construction Loan? 

The Federal Savings Bank is proud to offer a number of different loan options to prospective borrowers who want to build a home to keep their family safe for years to come. If you don’t already own the lot you want to build your home on, we can help you secure financing for both the land and the building of the house itself- often in one transaction, known as a construction-to-permanent loan. 

A free consultation with a member of the construction team at The Federal Savings Bank can help save you hours or days of research. Give us a call at 1-877-788-3520 to set up a time that works for you – the assistance of an expert is invaluable in today’s market. 


Subject to credit approval. Terms and conditions may apply. Property insurance is required on all loans secured by property. 

This information is intended for educational purposes only. Products and interest rates subject to change without notice. Loan products are subject to credit approval and include terms and conditions, fees and other costs. Terms and conditions may apply. Property insurance is required on all loans secured by property. VA loan products are subject to VA eligibility requirements. Adjustable Rate Mortgage (ARM) interest rates and monthly payment are subject to adjustment. Upon submission of a full application, a mortgage banker will review and provide you with the terms, conditions, disclosures, and additional details on the interest rates that apply to you individual situation.