Loan Programs → Construction and Renovation Loans

Finance the Property You Plan to Build or Transform

Construction and renovation mortgages can combine eligible acquisition, land, building, repair, and permanent financing. Northgate Mortgage helps borrowers and investors compare one-time-close, two-time-close, renovation, land, manufactured-home, modular-home, accessory-unit, and business-purpose project options.

Owner-occupied and business-purpose project financing through participating lenders.
Conventional, FHA, VA, USDA, jumbo, private, and investor structures where available.
Detailed review of plans, contractor, budget, permits, contingency, appraisal, inspections, draws, and permanent exit.

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Program Overview

Construction and renovation lending is more complex than financing a completed home. The lender generally evaluates the borrower, property, land, title, plans, specifications, contractor or builder, permits, project budget, contingency reserve, construction timeline, insurance, draw process, and as-completed value.

A one-time-close transaction uses one closing for construction and permanent financing. A two-time-close transaction uses a separate construction loan and later permanent mortgage. Construction-only financing must be repaid or refinanced when the construction term ends.

The borrower should not begin work, change contractors, alter plans, or pay major project costs without confirming the lender's rules. Unapproved work or payments may be ineligible for reimbursement.

Loan Options We Offer

One-Time-Close Construction-to-Permanent Loan

One closing provides the approved construction financing and permanent mortgage. During construction, funds are released through controlled draws. After completion and satisfaction of lender conditions, the loan converts or modifies into permanent financing under the closing documents.

Two-Time-Close Construction Loan

The borrower closes a short-term construction loan and later completes a separate permanent mortgage. The second closing can provide flexibility, but it also creates a second approval, potential market-rate risk, additional closing costs, and a requirement to qualify again.

Construction-Only Loan

Short-term financing covers eligible construction costs and must be repaid through sale, cash, or separately approved permanent financing at maturity. The lender underwrites the construction project and the documented exit strategy.

Conventional Construction-to-Permanent Loan

A conventional lender may finance eligible land acquisition, building costs, and permanent financing for a qualified primary residence, second home, or other approved occupancy. Fixed-rate and ARM permanent structures may be available.

FHA One-Time-Close Construction Loan

A participating FHA lender may combine eligible land, construction, and permanent owner-occupied financing. FHA borrower, property, builder, plans, appraisal, occupancy, mortgage insurance, and construction requirements apply.

VA One-Time-Close Construction Loan

An eligible Veteran or service member may use participating-lender VA construction financing for a primary residence. Certificate of Eligibility, entitlement, occupancy, builder, plans, appraisal, residual-income, construction, and VA requirements apply.

USDA Single-Close Construction Loan

A qualified household may finance eligible land, construction, and permanent primary-residence financing in an approved USDA area through a participating single-close lender. Household income, property location, builder, plans, and program requirements apply.

Jumbo Construction-to-Permanent Loan

A private lender may finance an eligible higher-value custom home or larger project. Detailed liquidity, reserves, income, builder, plans, cost, contingency, appraisal, inspection, and completion requirements are common.

Lot Loan

A lot loan finances an eligible residential parcel intended for future construction. Improved lots with utilities, legal access, zoning, surveys, and near-term building plans may receive different treatment from raw land.

Land Loan

Land financing may be available for an eligible parcel without immediate construction. Raw land generally requires more equity, stronger liquidity, shorter terms, and careful review of access, zoning, utilities, environmental conditions, topography, survey, taxes, and intended use.

Lot-and-Construction Combination Loan

A lender may finance an eligible lot acquisition together with the construction project and permanent mortgage. The appraisal typically considers the completed home and land, while the lender verifies land value, any existing lien, equity contribution, plans, and budget.

FHA 203(k) Limited Renovation Loan

The Limited 203(k) combines an eligible FHA purchase or refinance with approved repairs and improvements that generally do not involve major structural work. Contractor, scope, bids, appraisal, escrow, inspections, completion, and FHA requirements apply.

FHA 203(k) Standard Renovation Loan

The Standard 203(k) supports more extensive rehabilitation and may include eligible structural work. A 203(k) consultant, architectural documents, contingency reserve, permits, detailed draws, inspections, and additional project controls may be required.

Fannie Mae HomeStyle Renovation Mortgage

HomeStyle Renovation combines an eligible conventional purchase or refinance with approved renovation costs. It may support a broad range of improvements, subject to property, occupancy, contractor, appraisal, budget, draw, insurance, and completion requirements.

Freddie Mac CHOICERenovation Mortgage

CHOICERenovation may combine an eligible purchase or refinance with approved renovations. The lender evaluates the proposed work, contractor, appraisal, plans, budget, contingency, draws, inspections, and program limits.

Fannie Mae HomeStyle Refresh Mortgage

HomeStyle Refresh may include eligible improvements in a purchase or limited cash-out refinance. The lender reviews the project scope, eligible work, contractor or vendor documentation, completion requirements, and as-completed property standards.

Freddie Mac CHOICEReno eXPress Mortgage

CHOICEReno eXPress provides a streamlined renovation structure for eligible smaller-scale improvements. Current cost, completion, escrow, inspection, and delivery requirements apply.

VA Renovation Loan

A participating lender may include eligible repairs or improvements in a VA purchase or refinance. Property habitability, contractor, appraisal, plans, budget, completion, draw, and lender requirements vary.

USDA Purchase With Repairs

Certain eligible repairs may be included in a USDA purchase transaction. The lender reviews property condition, contractor, cost, appraisal, escrow or draw process, completion timing, household eligibility, and property location.

Manufactured Home Construction or Installation Loan

Financing may cover an eligible manufactured home, land, permanent foundation, delivery, setup, utilities, site work, and permanent mortgage. The home, dealer, contractor, title, installation, foundation, appraisal, age, and real-property treatment must meet the selected program.

Modular Home Construction Loan

A modular home is built in factory sections and installed on a permanent site under applicable building codes. Construction financing may cover land, foundation, transportation, assembly, site work, utilities, inspections, and permanent financing.

Accessory Dwelling Unit - ADU Construction or Renovation

An eligible owner may finance the construction or conversion of an accessory dwelling unit through a renovation, construction, cash-out, home-equity, or specialized program. Zoning, permits, appraisal treatment, rent use, property type, and program requirements apply.

Owner-Builder Construction Loan

A limited number of lenders may allow a qualified borrower to act as the general contractor. Licensing, experience, financial capacity, subcontractor controls, budget, schedule, conflict-of-interest, inspection, and contingency requirements are typically strict.

Investor Ground-Up Construction Loan

Business-purpose financing for an investor constructing an eligible residential or small multifamily property. The lender reviews land basis, plans, permits, builder experience, budget, contingency, draws, market, projected value or rent, and exit strategy.

Fix-and-Flip Renovation Loan

Short-term business-purpose financing may cover acquisition and rehabilitation of a non-owner-occupied property intended for resale or rental. The lender evaluates current value, after-repair value, scope, budget, experience, liquidity, timeline, and exit strategy.

Who This Program May Fit

A borrower building an eligible primary residence, second home, or custom home.
A buyer purchasing a property that needs approved repairs or major rehabilitation.
A homeowner adding space, modernizing systems, improving accessibility, or constructing an accessory unit.
A buyer acquiring an eligible manufactured or modular home with land and installation.
An investor constructing, renovating, or repositioning a non-owner-occupied property.
A borrower acquiring a residential lot or land with a clear development plan.

What Borrowers Should Prepare

Purchase contract, deed, title, survey, land or lot information, zoning, legal access, utility, environmental, and tax records.
Complete plans, specifications, line-item budget, construction contract, contractor or builder license, insurance, references, and experience.
Permits, engineering, architectural documents, soil or septic reports, utility plans, and association approval when applicable.
Bank, investment, retirement, gift, reserve, contingency, and cost-overrun funds documentation.
Income, employment, tax, business, debt, credit, and owned-property documentation required by the permanent loan program.
A realistic timeline and alternative plan for delays, changes, cost overruns, interest carry, or permanent financing.

How the Mortgage Process Works

1
Initial consultation: We discuss the borrower's goals, property, occupancy, timing, available funds, income, assets, credit profile, and existing mortgage obligations.
2
Program comparison: We identify potentially eligible loan structures and compare the major differences in payment, cash required, mortgage insurance, rate structure, closing costs, and long-term strategy.
3
Application and documents: The borrower completes a mortgage application and provides documents required for the selected program and lender.
4
Processing and underwriting: The lender reviews credit, income, assets, liabilities, property, title, insurance, appraisal, and program compliance.
5
Closing: After final approval and satisfaction of all conditions, the borrower reviews the closing documents and completes the transaction.

Important Considerations

Construction and renovation loans involve more documentation, time, inspections, fees, and lender controls than a completed-home mortgage.
The borrower is responsible for cost overruns not approved or funded by the lender.
Changes to plans, contractor, materials, or budget may require prior written approval.
Two-time-close and construction-only loans create permanent-financing and market-rate risk.
Land, raw acreage, owner-builder, unique-property, and large-project financing is highly lender-specific.
Future value, rent, completion date, and refinance approval are not guaranteed.

Frequently Asked Questions

What is the difference between one-time-close and two-time-close construction financing?

A one-time-close transaction closes the construction and permanent financing together. A two-time-close transaction uses a separate construction loan and a later permanent mortgage, requiring a second approval and closing.

How are construction funds released?

Funds are generally held in a controlled account and released in approved draws after inspections and required documentation confirm completed work. The lender controls the process and may not fund deposits or unapproved work.

Can I choose any contractor?

The contractor or builder must satisfy the lender's licensing, insurance, experience, financial, reference, contract, and project requirements. Approval is not automatic.

Can I do the work myself?

Most programs restrict sweat equity and owner-builder arrangements. A limited number of specialized lenders may consider an experienced, qualified owner-builder under strict requirements.

What happens if the project costs more than budgeted?

The borrower is generally responsible for cost overruns unless the lender approves an eligible change and additional financing. A contingency reserve may help, but it is controlled and may not cover every increase.

Does viewing this page mean I am approved?

No. Website information is not an approval, preapproval, commitment to lend, or guarantee of terms. A lender must review a completed application and all required documentation.

Are all of these options available in every state?

No. Availability depends on Northgate Mortgage licensing, participating-lender guidelines, property location, loan purpose, occupancy, and current investor requirements.

What determines my rate and closing costs?

Pricing may depend on market conditions, loan program, credit profile, loan amount, property type, occupancy, loan-to-value ratio, documentation method, lock period, points, lender credits, and other transaction details.

What is the first step?

Speak with a Northgate Mortgage loan specialist to review the goal and complete an application when ready. Qualification depends on the complete borrower, property, transaction, and lender review.

Turn the Plans, Property, and Budget Into a Financeable Project

Northgate Mortgage can help compare owner-occupied and investor construction, renovation, land, manufactured, modular, and permanent-financing options.

Call (888) 433-1448 Email Us Get Pre-Approved

Northgate Mortgage LLC is a mortgage broker and is not making a commitment to lend. All loan programs are subject to borrower and property eligibility, credit review, income and asset verification, appraisal, title review, underwriting approval, investor requirements, occupancy requirements, geographic restrictions, and applicable state licensing. Program availability, guidelines, rates, annual percentage rates, fees, loan limits, and terms may change without notice. Not all applicants will qualify, and not all programs are available in every state. This information is for educational and advertising purposes only and is not legal, tax, investment, or financial-planning advice. Equal Housing Opportunity.

Construction and renovation programs require project, contractor, appraisal, inspection, draw, title, insurance, and completion approval. Unapproved work or payments may not be reimbursed.

Projected completion date, completed value, rent, sale price, and permanent refinance are not guaranteed. Business-purpose investor loans are not for owner-occupied property.

Northgate Mortgage LLC | NMLS #2791086 | (888) 433-1448 | support@northgatemtg.com | northgatemtg.com