Construction loans in Sacramento — financing the home you'll build.
Building new in Sacramento, Placer, or El Dorado County? A construction-to-permanent loan finances your lot, your build, and converts to a regular mortgage at completion — one close, one set of fees. I'll walk you through draw schedules, builder requirements, and what lenders actually want to see.
Why Sacramento buyers choose Construction.
Is Construction right for you?
- Buyers who own a lot in Placer, El Dorado, or Sacramento County and want to build a primary residence.
- Move-up buyers selling a current Sacramento home and rolling proceeds into a new build.
- Anyone who wants a true custom home and has a licensed General Contractor lined up.
- Buyers comfortable with a 9-14 month timeline from groundbreaking to keys.
The Construction loan process, step by step.
- 01Pre-Approval & Plan ReviewStandard income/credit/asset review, plus lender review of your plans, specs, and contractor bid. Typically 1-2 weeks.
- 02Appraisal of Future ValueAppraiser values the home as if it were already built, based on plans and the local Sacramento comps.
- 03Close & Begin ConstructionOne closing. Lot funds (if applicable) disburse. Construction draws begin per a 4-6 stage schedule tied to inspections.
- 04Convert to PermanentAt final inspection and certificate of occupancy, the loan automatically converts to your permanent mortgage — fixed or ARM, your choice locked at the start.
Construction loans in Sacramento — FAQs.
How much down payment do I need for a construction loan?+
Typically 20-25% of total project cost (lot + construction). If you already own the lot free and clear, that equity often counts toward the down payment.
What credit score do I need?+
Most construction lenders want 680+, with the best terms at 720+. The credit standard is stricter than a regular purchase because the lender is taking on construction risk.
Can I act as my own General Contractor?+
Most lenders require a licensed, insured GC with a verifiable track record. Owner-builder loans exist but are rare and expensive in the Sacramento market.
What rate will I get during construction?+
Construction-period rates are typically 0.5-1% above the permanent rate. The permanent rate is locked at closing so you know your long-term payment from day one.
Do construction loans work for ADUs?+
Yes — ADU-specific construction loans and renovation loans like FHA 203(k) or Fannie HomeStyle can finance accessory dwelling units on an existing Sacramento property. Different product, similar principles.