Obtain a construction loan to build your home.
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Select your loan type — VA, FHA, USDA, or Conventional. The calculator will apply the correct maximum LTV automatically.
Enter your land cost — or the value of land you already own.
Enter your total construction cost — the fixed-price contract amount with your builder.
Enter the expected appraised value of the completed home and land.
Enter your interest rate estimate.
Enter your construction timeline in months.
Estimate monthly payments and total loan expenses before construction begins — before committing to a builder or lot.
Run the numbers on VA, FHA, USDA, and Conventional side by side to find the most cost-effective structure for your project.
Understand your obligations during the construction phase and after conversion to a permanent mortgage.
See exactly how adjusting your down payment changes your monthly payment and total interest paid over the life of the loan.
Visualize how interest accumulates during construction draws and how your rate affects total borrowing cost.
A construction loan funds your home build in stages rather than as a single lump sum at closing. Understanding the basic process makes the calculator outputs easier to plan around and helps you know what to expect at each phase.
Apply with a lender that originates construction loans. The lender reviews your credit, income, debt-to-income ratio, employment history, and the loan type you qualify for — VA, FHA, USDA, or Conventional. Review construction loan requirements for the complete borrower qualification checklist before submitting your file.
Pre-approval typically takes 24 to 48 hours once you submit a complete file. Your pre-approval confirms your maximum loan amount so you know your budget before you commit to land or a builder.
Three things must be in place before the lender can finalize your loan: the land you will build on, a licensed and insured builder, and a fixed-price construction contract with detailed plans and specifications.
If you do not yet own the land, you can include the land purchase in your construction loan as part of a one-time close transaction — review the loan to buy land and build a house guide for how this structure works. If you already own the land, your equity in that land counts toward your contribution to the project — review how a construction loan works when you own land for the mechanics of how existing land equity interacts with your loan at closing.
Use how to choose a home builder for a structured evaluation framework before finalizing your contractor selection.
The lender orders an appraisal that establishes the “after improved value” of the completed home plus land — this value caps how much you can borrow. Review the VA appraisal checklist to understand what inspectors evaluate and how the after-improved value is determined.
The lender also completes builder acceptance, which reviews your builder’s licensing (where required by state or local jurisdiction), general liability insurance, workers’ compensation insurance, recent project history, and the proposed draw schedule. Review how to become a VA-approved builder for the full lender acceptance criteria and documentation your builder needs to provide. Acceptance typically takes 2 to 5 business days once the lender has a complete package.
At closing you sign the loan documents and the construction loan funds. If you are buying land as part of the loan, the land closing happens in the same transaction. The construction budget plus a contingency reserve goes into an escrow account held by the lender — review financing home construction paperwork to understand what documentation your lender requires at each draw release stage.
With a one-time close construction loan, your interest rate locks at closing and stays locked through construction and beyond. With a two-close structure, you take rate risk during the build and have a separate closing for the permanent mortgage at the end. For most borrowers, the single close is the better choice — see construction to permanent loan for a full breakdown of how the conversion process works across both structures.
The builder begins work. As milestones are completed — foundation, framing, mechanical, finishes — the builder invoices the lender. The lender inspects each milestone, approves the work, and releases that draw from the escrow account directly to the builder. Most builds involve 3 to 5 draws over 6 to 12 months.
Understanding how long it takes to build a house before you close is essential — the construction timeline directly determines how long you make interest-only payments and how long your rate lock needs to cover.
During the construction phase, you make interest-only payments calculated only on the portion of the loan that has actually been disbursed. Your payment starts smaller in the early months and grows as more draws are released to the builder.
When construction is complete, the lender orders a final inspection. Once approved, the final draw releases and the loan converts to — or is refinanced into — the permanent mortgage. Your monthly payment shifts from interest-only to a full principal and interest payment based on the total loan amount, amortized over the standard 30-year term.
With a one-time close, this conversion is automatic. With a two-close structure, you complete a separate closing for the permanent mortgage at this stage. Either way, you begin making your full monthly mortgage payment — principal plus interest, plus any escrowed property taxes and homeowners insurance — once the home receives its certificate of occupancy.
Regardless of loan type, your builder must be licensed (where required by state or local jurisdiction), insured, and accepted by your lender.
Lender contractor acceptance reviews licensing, general liability and workers’ compensation insurance, recent project history, and the proposed draw schedule.
For VA construction loans specifically, see our VA approved builders page for a state-by-state guide and builder map
If you’ve owned for less than a year then your equity is typically determined by the difference between the loan balance and the original sales price.
If you are under contract to buy land, you have two main options.
Option A: Use a one-time close construction loan to buy the land and start construction in a single transaction. This works with VA, FHA, USDA, and conventional construction loans, but requires having a builder, fixed-price contract, and approved plans before the land closing date.
Option B: Pay cash for the land or use a separate land loan, then start the construction loan later once you have a builder and plans ready. If your timing is tight, ask the seller for a closing extension so you can line up the builder, plans, and one-time close construction loan in time.
First, determine if you can combine your land and construction loan. If you can’t you’re probably looking for the most common term for land loans in the US which is 3 to 5 years. The land is considered to be a riskier investment than a home, so lenders are more likely to require a shorter repayment period. Further, land loans often have higher interest rates than home mortgages. Security America Mortgage doesn’t do land loans unless they are wrapped into a one-time close construction loan.
There are some lenders that offer land loans with longer terms, up to 10 or 15 years. However, these loans are typically more difficult to qualify for and may have higher interest rates.
The specific term of a land loan will depend on a number of factors, including the borrower’s credit score, the amount of the loan, and the location of the land. It is important to shop around and compare rates from different lenders before choosing a land loan.
Here are some other factors that can affect the term of a land loan:
If you are considering a land loan, it is important to understand the terms and conditions of the loan before you sign docs. You should also be prepared to provide the lender with documentation of your income, assets, and debt just like on a home loan with us.
Enter the expected appraised value of the home built and land when your construction is complete.
Down Payment
This is the calculated required down payment to receive the loan.
Loan Amount
This is the calculated loan amount for your project.
Interest Rate
enter the expected interest rate for your loan and calculate your total interest.
Length Of Project (Months)
Number of months you expect your construction project to take to complete.
Initial Interest-Only Payment on Construction to permanent loans
The initial interest-only payment is calculated as an interest-only payment of the maximum loan minus the cost of construction. Interest-only payments are for temp to perm loans and they aren’t a va one-time close construction loan. In this case, you will have 2 closings, 2 sets of closing costs, and interest rate volatility based on market conditions and after the home is built you can choose permanent financing like the VA loan, Conventional loan, FHA loan, etc.
Final Interest-Only Payment
The final interest-only payment during construction is calculated as an interest-only payment for the maximum loan amount.
Principal And Interest Payment
The principal and interest monthly payment for the remainder of the 30-year term of the loan.
If you are under contract to buy land, you have two main options.
Option A: Use a one-time close construction loan to buy the land and start construction in a single transaction. This works with VA, FHA, USDA, and conventional construction loans, but requires having a builder, fixed-price contract, and approved plans before the land closing date.
Option B: Pay cash for the land or use a separate land loan, then start the construction loan later once you have a builder and plans ready. If your timing is tight, ask the seller for a closing extension so you can line up the builder, plans, and one-time close construction loan in time.
| Situation | Best Loan Type |
|---|---|
| Veteran or active duty with VA entitlement | VA Construction Loan |
| Building in a rural area with moderate income | USDA Construction Loan |
| First-time buyer with limited down payment | FHA Construction Loan |
| Strong credit, building a high-end home | Conventional Construction |
| Loan amount exceeds VA county limits with partial entitlement | Conventional or VA Jumbo |
| Buying land and construction in one transaction | Any One-Time Close Loan |
The maximum loan to value ratio (LTV) determines how much you can borrow against the project’s value. Higher LTV means less money out of pocket at closing.
| Loan Type | Max LTV | Down Payment | Mortgage Insurance |
|---|---|---|---|
| VA Construction Loan | 100% (+ VA funding fee) | $0 with full entitlement | None — ever |
| USDA Construction Loan | 100% of market value | $0 in eligible areas | Annual guarantee fee |
| FHA Construction Loan | 96.5% | 3.5% minimum | Upfront + monthly MIP |
| Conventional (HomeOne) | Up to 97% | 3% minimum — first-time buyers | PMI until 20% equity |
| Conventional (Standard) | Up to 95% | 5% minimum | PMI until 20% equity |
For veterans, the VA construction loan is almost always the best option because of the combination of $0 down, no monthly mortgage insurance, and competitive interest rates.
Yes. The calculator is free with no obligation. It provides estimates only. Final loan amounts, interest rates, and qualifying terms are determined by your lender after a full application.
Yes. The calculator is free with no obligation. It provides estimates only. Final loan amounts, interest rates, and qualifying terms are determined by your lender after a full application.
The calculator shows the loan amount and monthly payments. Closing costs vary by lender and state. For a personalized closing cost estimate, contact us at (855) 701-2816 or start a pre-approval application.
The calculator provides estimates based on the inputs you provide. Actual loan terms depend on your full financial profile, credit, the property appraisal, market interest rates at closing, and lender underwriting. Use the calculator for planning purposes and follow up with a lender for personalized numbers.
Yes. Enter the appraised value of land you already own. The calculator treats this as a contribution toward the project, reducing the loan amount needed.
A one-time close construction loan combines the construction loan and the permanent mortgage into a single loan with one closing. The interest rate locks at the start of construction. A two-close structure involves separate closings for construction and permanent financing, with two sets of closing costs and rate exposure during construction.
Your loan amount is capped at the lower of the construction cost plus land value or the appraised value. If the appraisal comes in lower than expected, you may need additional cash at closing to make up the difference, or you may need to reduce the construction scope.
Yes. After construction completes and you have a permanent mortgage, you can refinance using a VA IRRRL (for VA loans), an FHA Streamline (for FHA loans), or a standard refinance for other loan types.
For deeper VA-specific calculations, including funding fee handling and the disability funding fee waiver, see our VA construction loan calculator
Determine how much home you can afford.
Learn what it costs to fund a VA loan.
Calculate your Basic Housing Allowance.
Find out how much you can borrow for $0 down.
Obtain a construction loan for building or improving a home
Estimate your loan preapproval amount based on your income and expenses.
See if refinancing makes sense for you.
Estimates your monthly VA mortgage payment