Construction financing works differently from a traditional mortgage. We guide you through every option, connect you with trusted local lenders, and provide the documentation they need to get your project approved.
Construction financing works differently from traditional mortgages. Instead of one lump sum at closing, funds are released in stages as your home is built. The process involves different loan types, draw schedules, and lender inspections that most homebuyers have never encountered.
At Best Construction, we guide you through every step. We connect you with trusted local lenders experienced in construction lending, provide the detailed documentation they require, and manage the draw process throughout your build. Our 30+ years of lender relationships mean a smoother approval process for you.
Learn more about the details in our complete financing guide or our construction mortgage overview.
See how each financing option stacks up. For a deeper look at construction mortgages, read our construction mortgage guide.
| Loan Type | Min Down Payment | Credit Score | Best For |
|---|---|---|---|
| One-Time Close | Varies (5-20%) | 680+ | New builds, rate certainty |
| Two-Time Close | Varies (5-20%) | 680+ | Rate shopping flexibility |
| FHA Construction | 3.5% | 580+ | First-time buyers, lower down payment |
| FHA 203(k) | 3.5% | 580+ | Major renovations, fixer-uppers |
| VA Construction | 0% | Varies | Veterans and active-duty |
| HELOC | N/A (equity based) | 680+ | Additions, remodels with equity |
| USDA Construction | 0% | 640+ | Rural eligible areas |
| Conventional | 20-25% | 680+ | Strong financials, fewer restrictions |
Construction financing works differently from a traditional mortgage. Instead of receiving all funds at closing, your lender releases money in stages called "draws" as construction milestones are completed. You pay interest only on the amount drawn, and once your home is finished, the loan converts to a permanent mortgage. Here is the step-by-step process.
Meet with our team to discuss your project scope, budget goals, and financing needs. We help you understand what lenders will require and which loan type fits your situation. If you need help finding land, explore our build on your lot options.
We connect you with trusted local lenders experienced in construction financing. They review your credit, income, and assets to determine your borrowing capacity and the best loan option.
Work with our team to finalize floor plans, specifications, and a detailed construction budget. Lenders require this level of detail for construction loan approval.
The lender orders an appraisal based on your plans, specs, and comparable homes in the area. The appraised future value of your completed home determines your loan amount.
Once approved, you close on your construction loan. For one-time close loans, this is your only closing. You pay closing costs once and lock in your permanent rate.
We begin building your home. Funds are released in stages as construction milestones are completed. You pay interest only on the amount drawn during construction.
The lender sends an inspector to verify work completion before releasing each draw. We coordinate all inspections and ensure everything is documented properly.
When your home is finished, the construction loan converts to your permanent mortgage. For two-time close loans, you close on a separate permanent mortgage at this stage.
Ohio offers several programs that can make building a home more accessible, especially for first-time buyers.
The Ohio Housing Finance Agency (OHFA) offers down payment assistance programs that can significantly reduce upfront costs for qualified buyers. Programs can be combined with FHA, VA, USDA, or conventional loans. Assistance amounts, forgiveness terms, and eligibility requirements are updated periodically, so visit the OHFA website or ask your lender for current program details.
Construction lending requires specialized knowledge that not every bank has. We work with local banks and credit unions in the Cleveland and Akron area that have dedicated construction lending teams. These lenders understand the local market, appraisal values, and the construction process.
Building a new home as a first-time buyer is absolutely possible. FHA construction loans require just 3.5% down, and OHFA assistance can cover most or all of that. Start by getting pre-qualified, then work with us to design a home that fits your approved budget. Learn more in our detailed financing guide.
The builder you choose directly affects how smoothly your construction financing goes. Here is what we bring to the process.
We provide everything your lender needs for approval: detailed construction budgets, material specifications, project timelines, and builder credentials. No back-and-forth delays waiting for paperwork.
We handle the entire draw process. When milestones are reached, we coordinate lender inspections, submit draw requests, and ensure funds are released on schedule to keep your project moving.
Local banks and credit unions know us. Our track record of completed projects, transparent budgets, and professional documentation gives lenders confidence in approving your loan.
Lenders require detailed cost breakdowns before approving construction loans. We provide comprehensive line-item budgets from the start, so there are no surprises for you or your lender.
We help homeowners navigate construction financing throughout Summit and Cuyahoga County, including:
Explore our free guides to help you plan your project.
Construction financing works in stages. You get approved for a construction loan, then as your home is built, the lender releases funds in "draws" at key milestones (foundation, framing, mechanicals, finishes). You pay interest only on what has been drawn. Once construction is complete, the loan converts to a standard permanent mortgage.
Construction loans are short-term loans that fund building in stages called "draws." You pay interest only on the amount disbursed during construction, then the loan converts to a permanent mortgage once the home is complete.
A one-time close (or single-close) construction loan combines the construction financing and permanent mortgage into one loan with one closing. This saves on closing costs and locks in your rate upfront. It is the most popular option for new home builds.
It depends on the loan type. FHA requires as little as 3.5% down, conventional typically requires 20% to 25%, and VA and USDA loans offer 0% down for eligible borrowers.
Yes. FHA construction-to-permanent loans finance both the build and permanent mortgage with as little as 3.5% down. Credit score requirements start at 580 for most lenders.
An FHA 203(k) loan lets you finance the purchase of an existing home plus the cost of major renovations in a single loan. It is designed for significant remodeling projects, not new construction. This is a great option if you are buying a fixer-upper.
Yes. We have trusted relationships with local banks experienced in construction financing and provide lender-ready documentation including detailed budgets, draw schedules, and project timelines.
A draw schedule outlines when funds are released from your construction loan. Lenders release money in stages as construction milestones are completed, such as foundation, framing, and rough mechanicals. The lender inspects progress before each draw is approved.
Yes. The Ohio Housing Finance Agency (OHFA) offers down payment assistance programs for qualified buyers. Program amounts, forgiveness terms, and eligibility requirements change periodically, so check the OHFA website or ask your lender for current details.
FHA construction loans require a minimum of 580, conventional loans typically require 680 or higher, and VA requirements vary by lender. Higher scores qualify for better rates.
Not necessarily. Many construction loans finance the land purchase along with construction costs. If you already own land, its value can often count toward your down payment.
Disclaimer: Best Construction is a home builder, not a lender or mortgage broker. The financing information on this page is provided for general educational purposes only and may not reflect current rates, terms, or program requirements. Loan eligibility, interest rates, and program details vary by lender and change frequently. Consult a licensed mortgage professional for advice specific to your financial situation.
Schedule a free consultation. We will walk you through your financing options, connect you with trusted local lenders, and help you plan a home that fits your budget.