Best Construction Loan Lenders

We want to help you make more informed decisions. Some links on this page — clearly marked — may take you to a partner website and may result in us earning a referral commission. For more information, see How We Make Money.

Homeshopping is hard. Either you fall in love with a home you can’t afford, are outbid, or you can’t find anything you like.

One solution is to build the house you want, and a construction loan can help provide the necessary financing. 

To do this, you’ll need a construction loan, and not all lenders offer this type of specialty loan product. If you’re interested in going this route, we’ve done the research with our top picks for the best construction loan lenders. 


As with all of our mortgage lender reviews, our analysis is not influenced by any partnerships or advertising relationships. For more information about our scoring methodology, click here.

Best Construction Loan Lenders 

Best With Fast Preapprovals and Closings
Guaranteed Rate
Guaranteed Rate
Best With Fast Preapprovals and Closings
Guaranteed Rate
  • Guaranteed Rate’s Standout Feature::
    Guaranteed Rate says it can provide a preapproval letter in around 15 minutes, and the company goal is to be clear to close within 10 days.

NextAdvisor’s Take

  • More than 400 branch locations nationwide
  • Operates in all 50 states and Washington, D.C.
  • Fully online mortgage application process
  • Detailed advertised rates for many of its loan products
  • Online preapproval 15 minutes
  • Fast closings
  • Lenders fees not available online
  • Some loan types are brokered off to other lenders
The Bottom Line

Guaranteed Rate is a Chicago-headquartered firm with a strong online presence and 400 branch locations  across the country. We ranked the company a top lender because of its top-of-the-line digital experience, helpful consumer tools, solid customer service, and variety of loan products, including all three government loans.

Guaranteed rate received fewer consumer complaints compared to most other lenders we reviewed. The company logged less than one complaint per 1,000 loans originated with the Consumer Financial Protection Bureau (CFPB) consumer complaint database, the agency responsible for collecting, monitoring, and responding to U.S. consumer complaints about financial services and products.

See our full review of Guaranteed Rate here.

Best for the Non-Traditional Borrower
North American Savings Bank
North American Savings Bank
Best for the Non-Traditional Borrower
North American Savings Bank
  • NASB’s Standout Feature:
    NASB has several programs that can help non-traditional borrowers get a home such as the self-employed and those with a less-than-prefect credit history.

NextAdvisor’s Take

  • Lends in 50 states
  • Has unique loans products for borrowers with credit issues or are self-employed
  • Advertises daily interest rates for purchase and refinance loans
  • Can get lower rate if rate drops during 90-day rate lock period
  • Streamlined online application process
  • Can get customized rate quote without hard credit check
  • 12 in-person branches, but only in Missouri
  • Does not offer USDA loans, construction loans, renovation loans, and home equity products
  • Higher credit score standards on FHA and VA loans
The Bottom Line

Headquartered in Kansas City, Missouri, North American Savings Bank (NASB) is a full-service bank that lends in all 50 states. North American Savings Bank has a more extensive mortgage menu than most, including options for veterans, first-time homebuyers, self-employed people, and borrowers with less-than-perfect credit histories. That’s because the bank offers VA loans, FHA loans, and mortgages for people who don’t fit conforming loan standards. NASB also has a streamlined online application process with transparent pricing for browsing borrowers.

See our full review of North American Savings Bank (NASB) here.

Best for Full Service Banking
Truist (SunTrust and BB&T) Mortgage
Truist (SunTrust and BB&T) Mortgage
Best for Full Service Banking
Truist (SunTrust and BB&T) Mortgage
  • Truist Bank’s Standout Feature:
    There is an allure of convenience to also have your mortgage through the same institution you bank with

NextAdvisor’s Take

  • Offers a full lineup of the major mortgage programs
  • Advertises sample mortgage rates on both the SunTrust and BB&T websites
  • Mortgages available in 47 states and Washington, D.C.
  • Can submit an application online, by phone, or in person
  • Gathering mortgage product information is slightly confusing because of the merger
  • Mortgages not available in Hawaii, Alaska, or Arizona
The Bottom Line

Truist Bank, now merged with Suntrust and BB&T under its name, has an extensive footprint across the U.S. through its thousands of brick-and-mortar branches and online presence. Along with the company’s solid menu of mortgage products, easy-to-use online application process, transparency of rate and fee information, and average number of complaints compared to other reviewed lenders, the brand’s website is easy to navigate with several useful resources to help with the borrowing process, such as calculators, videos, and sample mortgages.

Truist offers a comprehensive menu of online or in-person banking accounts such as checkingsavingsmoney market, and CDs. If you are in the market for a bank, looking to switch banks, or already have a Truist account, there is an allure of convenience to also have your mortgage through the same institution. Some lending institutions also give incentives or discounts to existing account holders.

See our full review of Truist Bank here.

Honorable Mentions

Wells Fargo



U.S. Bank

PrimeLending Mortgages

Fairway Independent Mortgage


What Are Today’s Mortgage Rates?

On Monday, February 06, 2023, according to Bankrate’s latest survey of the nation’s largest mortgage lenders, the average 30-year fixed mortgage rate is 6.460% with an APR of 6.470%. The average 15-year fixed mortgage rate is 5.710% with an APR of 5.740%. The average 5/1 adjustable-rate mortgage (ARM) rate is 5.420% with an APR of 7.390%.

Current Mortgage and Refinance Rates

ProductInterest RateAPR
30-Year Fixed Rate6.510%6.520%
30-Year FHA Rate5.690%6.610%
30-Year VA Rate5.770%5.980%
30-Year Fixed Jumbo Rate6.550%6.560%
20-Year Fixed Rate6.470%6.480%
15-Year Fixed Rate5.800%5.820%
15-Year Fixed Jumbo Rate5.860%5.880%
5/1 ARM Rate5.340%7.150%
5/1 ARM Jumbo Rate5.350%6.890%
7/1 ARM Rate5.930%6.670%
7/1 ARM Jumbo Rate6.080%6.340%
10/1 ARM Rate6.250%6.570%
ProductInterest RateAPR
30-Year Fixed Rate6.460%6.470%
30-Year FHA Rate5.680%6.580%
30-Year VA Rate5.800%5.920%
30-Year Fixed Jumbo Rate6.490%6.500%
20-Year Fixed Rate6.480%6.500%
15-Year Fixed Rate5.710%5.740%
15-Year Fixed Jumbo Rate5.790%5.810%
5/1 ARM Rate5.420%7.390%
5/1 ARM Jumbo Rate5.500%7.380%
7/1 ARM Rate5.930%6.620%
7/1 ARM Jumbo Rate6.090%6.260%
10/1 ARM Rate6.130%6.670%

Rates as of Monday, February 06, 2023

What Is a Construction Loan?

Construction loans versus traditional mortgage loans have a few notable differences. While most mortgages are used to finance an existing home that has already been built, a construction loan is a short-term loan used primarily to finance the costs of building a new property. 

There are also different types of construction loans, and because they are not usually meant to provide a permanent source of financing, many construction loans must be replaced with a more permanent traditional mortgage loan after a certain time frame. Since construction loans are also viewed as higher risk by lenders, the interest rates are often higher than that of a traditional mortgage product, so it’s in the borrower’s best interest to find a source of permanent financing sooner rather than later.

Construction Loan Types

Depending on your circumstances, there are several different types of construction loans that you can choose from.

  • Construction-only loan: Used to finance the costs of building a home, and must typically be replaced with permanent financing within 12 months.
  • Construction-to-permanent loan: Used to finance the costs associated with constructing the home, converting to permanent financing once the build is completed. Since this loan automatically switches to permanent financing, you can avoid closing costs that would normally be incurred by having to obtain another mortgage loan.
  • Owner-builder loan: This type of loan allows funds to be disbursed directly to the owner, rather than a third-party builder. As a requirement for this loan, the owner must often provide proof of a contractor’s license and a track record of having built their own homes.
  • Renovation loan: As its name implies, a renovation loan allows for the proceeds to be used to conduct repairs to a home. 

How to Find the Best Construction Loan Lender for Your Situation

In finding the best home construction lender, first, consider your personal circumstances and what’s important to you. This might involve finding a lender that has the lowest fees or one that offers the type of construction loan that suits your preferences. It could even be a lender that is rated highly for customer service. Some lenders excel at certain areas more than others, so if you’re not able to find a lender that meets all of your criteria, you may need to prioritize aspects that are deal breakers for you, and which ones you can do without. 

To find the best construction lender, below are a few additional items to consider.

Determine Construction Needs First

A good first step in determining what lender to go with is to consider what you want to do, as this will affect the type of loan you’ll need to look for. If you’re looking to build a home from the ground up, you’ll need a lender that offers construction loans. On the other hand, if you’re interested in purchasing a home that needs repairs, you’ll need to find a lender that offers renovation loans instead. 

Loan Programs Offered

Choosing the wrong type of loan even with an otherwise stellar lender may end up costing you more in total costs. Once you’ve narrowed down your construction needs for a home, think about what type of loan is best suited for your needs. For instance, if you are comfortable acting as your own general contractor and have experience with building homes, you may prefer the flexibility of an owner-builder loan. On the other hand, if this is the first time you are building a home, you may have to choose from either a construction-only loan or a construction-to-permanent loan

Also consider the flexibility of the construction loan. Construction loans can have varying terms, such as when it must be replaced with a permanent loan once the home build is completed, or whether it will automatically convert to permanent financing after a certain period of time. Loans that automatically convert can potentially save you thousands on closing costs that would otherwise need to be paid to another lender, although the subsequent interest rate may not be as competitive.  

Compare Lenders and Fees

Before you make any final decisions on which lender to use, make sure you’ve shopped rates and obtained written estimates from at least a handful of different companies. Pay close attention to fees, as some lenders may offer a lower interest rate, but charge additional closing costs or discount points. To figure out if it’s worth it to pay those extra costs, you can use a mortgage calculator to determine things like your break even point and what you’ll end up paying over the life of the loan. 

How to Qualify for a Construction Loan

Lenders will use a number of different criteria to evaluate whether you qualify for a construction loan. Some of these items may be similar to that of a conventional mortgage, and include the following items:

  • Income: You’ll need to be able to show a stable and consistent source of income that can be used to repay the loan. If you are self-employed or have variable hours, you may be asked for additional documentation to ensure the income is stable and likely to continue. 
  • Credit: Your credit report will show how much debt you currently have, and will help the lender determine how much additional payments you can afford. Additionally, your credit score will affect your eligibility for the loan as well as the interest rate you can get.  
  • Down payment: Since construction loans are generally a higher risk for the bank, many lenders will require at least a 20% down payment, which is based on the total projected costs of building the home. 
  • Construction plan: As part of the underwriting process, lenders may also require a detailed plan and specifications of the type of home you plan on building. 
  • Home builder: The home builder you select to complete construction of the property may need to be reviewed and approved by the lender to ensure they are appropriately licensed, insured, with an acceptable track record of prior home builds. 
  • Appraisal: An appraisal will inform the lender what the value of the home should be once the project is completed. This will help them determine how much of a down payment may be required.

How We Chose the Best Construction Loan Lenders

Our Methodology

To find the best construction loan lenders, we first looked at NextAdvisor’s best mortgage lenders list and then eliminated any lender that does not offer construction loans. 

To score the best mortgage lenders, we’ve developed a framework using a weighted average score between 0 and 5, with more weight awarded to the criteria we determined to be the most important.

Our list doesn’t take into account key financial factors like mortgage rates, APRs, and fees, because those depend on market conditions and your individual creditworthiness. Instead of focusing on those numbers, it’s best to first determine the qualities you want in a lender and how to find the best mortgage rates. Then you’ll be prepared to find the best lender for you.

The factors we used to evaluate the best mortgage lenders:

  1. Online Convenience: A lender is scored 1 through 5 based on the company’s online application experience. A 5 is awarded if the company’s mortgage application can be completed fully online with a streamlined process, including uploading documents and a customized rate quote. A lower score is awarded if additional phone calls are needed to process an application or for a poor online user experience.
  2. Transparency: Lenders are scored 0 through 5 based on the accessibility and transparency of mortgage rates, lender fees, and credit check requirements for rates and/or fees. A 5 is awarded if the lender advertises rates and fees on its websites and doesn’t require a hard credit check to get rates and/or fees. Conversely, a lower score is awarded when consumers cannot easily access rate and fee information and/or must go through a hard credit check to access them.
  3. Nationwide Availability: Lenders are scored 1 through 5 based on the company’s geographical footprint. A lender can score a 5 if it operates in all 50 U.S. States. Lenders were eliminated from this list if they are not licensed to lend in the state of Georgia.
  4. Loan Product Variety: Lenders are scored 1 through 5 based on their loan product menu and variety of products offered. A high score of 5 is given if most or all mortgage products are available, with a lower score awarded for a limited mortgage menu.
  5. Customer Satisfaction: To measure customer satisfaction, we reviewed the number of complaints filed against each lender with the Consumer Financial Protection Bureau in 2020. We divided the total consumer complaints with the total number of loans originated over the same time period to get a complaint ratio per 1,000 loans originated. We sourced the total loans originated using publicly accessible data provided under the Home Mortgage Disclosure Act and regulated by the Federal Financial Institutions Examination Council (FFIEC).

Frequently Asked Questions (FAQ):

Is a construction loan harder to get than a traditional mortgage?

Generally speaking, a construction loan can be more difficult to qualify for. The approval process tends to involve more documentation compared to a conventional mortgage, and this is because there are many more variables given the loan is dependent on the reputation of a third-party on a home that is not yet built. 

What credit score do I need to get a construction loan?

While the minimum credit score required may vary depending on the lender and type of construction loan, a score of 620 should give you some options to choose from. Some lenders may require an even higher credit score depending on the characteristics of the construction loan, such as the amount of the down payment, your income, and specifications of the home to be built.  

What kind of interest rate will I get with a construction loan?

Interest rates on a construction loan will be higher than that of most other mortgage loans. This is because of the higher risk posed to the lender. If a borrower defaults on a construction loan, the lender may not have a property it can take over as collateral to recoup its costs.