Loan Programs

Financing for the house that is not built yet.

For a new build, a custom home, or a rebuild of the house you already own — underwritten against the plans, and funded in draws as the work goes up.

What Is a Construction Loan?

Financing for a house that does not exist yet, released as it goes up.

A construction loan finances building a new home, or a major rebuild of one you already own, against the plans and the builder rather than an existing house. Money is released in draws as inspected work is completed.

A single-storey house under construction on a graded lot, its timber frame and roof trusses up and sheathing part-way on, with foothills behind and lumber stacked under a navy tarp

Why Borrowers Choose Construction Financing

Four reasons building or rebuilding beats waiting for the right house to come up.

Build what you actually want. A build answers the requirements no listing on the market does — the lot, the layout, the accessible ground floor, the shop out back — instead of settling for the closest compromise.
Rebuild rather than move. A house on the right street with the wrong bones can be taken back to the studs or taken down entirely, and the same financing covers the rebuild.
Pay for the work as it is done. Funds are released in draws against inspected progress, so you are not carrying the whole build from day one and the money follows the work.
One close, if the structure allows it. A construction-to-permanent loan closes once and converts to a conventional mortgage at completion, rather than asking you to qualify and close a second time.

More Than a Loan Program

Every other program here is underwritten against a house. This one is underwritten against a plan.

The underwrite is of a plan, not a house. There is no property to appraise yet, so the file is the drawings, the specification, the contract and the budget — which is why the builder is reviewed as carefully as the borrower.

The loan you finish with is the one that matters. A build converts to a permanent mortgage, and whether that is conventional or jumbo depends on the finished value. Alliance plans for that at the start rather than at the end.

Is a Construction Loan a Good Fit?

Four things construction financing does that no other program on this site can.

It finances something that is not there. Every other program on this deck needs a finished house to lend against. This is the only one that funds a lot, a slab and a frame on the strength of the plans.
A rebuild is not a renovation loan. Taking a house back to the studs is a build, not a repair, and it is financed on this structure rather than on the smaller rehab route an FHA borrower might ask about.
One qualification instead of two. A single-close loan locks your qualification in once, so a change in income or credit during a year of building does not put the permanent mortgage back in question.
Somebody is checking the work. Draws are released against inspections, which means the lender is verifying that what was paid for is actually built — a protection a purchase mortgage has no reason to offer.

House plans unrolled on a pale oak table, a floor plan and elevation drawing clipped flat, with a scale rule and pencil across them, a navy specification booklet and a mug of coffee

Compare the Paths With Alliance

One conversation about the build, the budget and the mortgage it turns into at the end.

We read the plans and the budget together. Your Alliance loan officer reviews the drawings, the contract and the draw schedule beside the conventional or jumbo mortgage the build converts into, so both ends are decided at once.

Building is not always the cheaper answer. Sometimes a finished house at the right price beats a year of construction, and we will say so — the comparison is run honestly rather than toward whichever loan is larger.

Getting build-ready

Five things decide whether a build is financeable, and two of them are about the builder.

A two-storey house at the framing stage, with timber studs and roof trusses up, sheathing part-way on the lower walls, a ladder against the frame and stacked lumber in the foreground

Your builder. The general contractor is underwritten too — licensing, insurance, financial standing and a record of finishing what they start. A borrower who qualifies easily can still be held up by a builder who does not.
Plans, specifications and a fixed contract. Complete drawings, a written specification and a signed contract with a firm price and a timeline. The appraisal is done against those documents, because there is nothing standing to walk through.
A contingency reserve. Lenders require a percentage of the build budget held back for the things that always come up — a rock shelf, a code change, a supplier who stops shipping. It is part of the budget, not an extra.
The draw schedule. Money is released in stages tied to completed, inspected work rather than to invoices. Your builder has to be able to carry each stage until its draw clears, which is a question worth asking them early.
Credit, equity and the finished value. Construction files are read more strictly than a purchase: stronger credit, more of your own money in, and a loan sized against the appraised value the finished house is projected to reach.

Construction Loan FAQs

The questions borrowers ask most before committing to a build or a rebuild.

Do I close once or twice?

Both structures exist. A construction-to-permanent loan closes once and converts at completion; a two-close structure means a separate construction loan and then a new mortgage, with a second qualification and a second set of closing costs. A loan officer can tell you which fits your build.

When do I start making payments?

During construction you typically pay on what has actually been drawn rather than on the full loan amount, so the payment grows as the house does. Full payments begin when the loan converts to a permanent mortgage.

Can I act as my own general contractor?

Rarely, and it is the exception rather than the rule — most lenders require a licensed general contractor because the builder is part of the underwrite. If you hold a licence yourself, bring that up at the first conversation.

Does this cover a teardown and rebuild?

Yes — a major reconstruction of a house you already own is financed the same way as a new build, with the lot you hold counted toward the equity in the deal. A cosmetic remodel is a different product entirely.

What happens if the build runs over budget?

That is what the contingency reserve is for, and why the contract is priced and the draws are inspected. If an overrun outruns the reserve, the shortfall is yours to cover, so the budget is worth stress-testing before you sign.