Construction Loans

Construction Loans


Constructions loans are a beneficial tool for Borrowers and a short-term, high-interest loan that accommodate the funds for the residential build.

Features and benefits:

  • Terms of 15 and 30 years
  • Fixed rate
  • Max LTV up to 89.99%
  • Conforming one-time close 9-month construction term program allowing payment of interest only during construction

Eligible property types:

  • 1 unit site-built homes
  • Planned unit development
  • Modular homes (constructed in the sections off-site, but when installed at the site takes on the characteristics of a site-built home)
  • Site condominium (detached), must be fee simple interest for land and dwelling
  • Rural properties
  • Properties where construction has already begun

Q&A for Construction loans:

How do I apply for a construction loan?

Contact your mortgage loan advisor to go over the construction loan that will best fit your needs.  Be prepared to provide personal documentation.

Can I do the work myself and act as the General Contractor?

Neighborhood Mortgage does not allow for homeowners to act as their own builder or general contractor.  All General Contractors must be licensed and bonded and be approved by the lender.

When do I need to have my building permits?

Permits are required prior to completion of the first draw, after closing.  The Closing draw is not considered the first draw.

Will the budget require a contingency?

Yes, a 5% contingency is required for all construction projects and must be included on the builder’s budget.  A contingency is set aside for any unforeseen overages beyond what the contractor budgeted in the bid.

What are the requirements for hazard insurance on construction loans?

A builder’s risk policy is required.  Coverage should be effective on or before closing.  The coverage should be equal to or greater than the loan amount.

How do I estimate the total cost of my construction project?

Once you have selected a contractor, they will be able to put together a detailed list of all materials, supplies and labor costs for your project.

What is a draw on a construction loans?

A construction loan works the same way as a line of credit during the construction period.  Once certain milestones are completed a request can be made for funds to be released to the builder to pay for the work that has been completed.

Getting started is easy. We offer very competitive rates, have great service, and always close on time.


Licensing Info: Brandi Braley
NMLS # 1562598
Neighborhood Mortgage
NMLS # 62776
Licensed in Washington & Arizona
Neighborhood Mortgage Corporate Site


Equal Housing Lender

Contact Us

Brandi Braley-Neighborhood Mortgage
4164 Meridian St #108
Bellingham, WA 98226

(360) 389-6361