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New Construction
Interest-Only Payments: During the 12–18 month build phase, borrowers typically only pay interest on the funds actually disbursed. This keeps monthly costs low while they are potentially still paying rent or a current mortgage.
One-Time Closing (C2P): The Construction-to-Permanent (C2P) loan is the gold standard. Borrowers close once, pay one set of closing costs, and the loan automatically converts to a 15- or 30-year mortgage upon completion.
Rate Lock Security: Many 2026 products allow borrowers to lock in their long-term mortgage rate before the first shovel hits the ground, protecting them if rates rise during the year-long build.
Customization Power: Unlike buying existing inventory, every dollar borrowed goes toward a home built to modern energy codes (crucial for 2026 insurance and utility savings) and personal specifications.
Equity from Day One: If the "as-completed" appraisal comes in higher than the build cost, the borrower starts their mortgage with instant home equity.
Borrower Requirements
Lenders view construction as "high risk" because there is no finished house to serve as collateral if things go south. Consequently, requirements are stricter than standard mortgages.
Credit Score
680 – 720+
Scores below 680 often face much higher rates or require a 25% down payment.
Down Payment
20% – 25%
FHA/VA options exist (3.5% or 0% down), but conventional builds usually require 20% of the total land + build cost.
Debt-to-Income (DTI)
Max 43% – 45%
Lenders are strict here to ensure the borrower can handle the "end loan" payments.
Cash Reserves
6 – 12 Months
Proof of "reserve" cash after closing to cover unexpected cost overruns.
How it Works
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Got questions? We're here to help! Whether it's about mortgage rates, plans, or the process, feel free to ask us anything. We're ready to guide you every step of the way!
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The "Project Package" (Necessary Documentation)
You cannot get a construction loan with just a bank statement. The lender must "approve" the project and the builder.
The Builder’s Files
Builder Credentials: License, proof of General Liability insurance, and Worker’s Compensation.
Resume of Experience: Many 2026 lenders require the builder to have completed at least 3-5 similar projects in the last 24 months.
Signed Fixed-Price Contract: Lenders hate "cost-plus" contracts; they want a guaranteed maximum price to minimize risk.
The Project Files
Blueprints & Specs: Professional architectural plans and a "spec book" detailing every material (from the type of insulation to the brand of faucets).
The "Draw Schedule": A timeline of when the builder gets paid (e.g., 10% after foundation, 20% after framing).
Line-Item Budget: A granular breakdown of every cost, including a 10%–15% contingency fund for surprises.
In summary, a construction loan is not an easy process to go through
The Land Factor: If the borrower already owns the land, the equity in that land can often count toward their down payment.
The Appraisal: Mention that the appraisal is "subject to completion." The appraiser looks at the plans and the dirt and estimates what the house will be worth.
Inspection Draws: Explain that the lender will send an inspector to the site before releasing money to the builder at each stage to ensure the work was actually done.
Testimonials
— Michael R.
I had an incredible experience with them]. The team was attentive and helped me navigate the mortgage process smoothly. Thanks to their expert guidance, I was able to secure my dream home without any hassle. Highly recommend!
— Sarah T.
The support I received from them was outstanding! They took the time to understand my needs and found the perfect financing solution for my investment property. I couldn't have done it without them!
Frequently Asked Questions
What is a hard money loan?
A hard money loan is a short-term financing option secured by real estate, primarily based on the property's value rather than the borrower's creditworthiness. These loans typically have higher interest rates and quicker approval times, making them suitable for urgent funding needs or real estate investments. The exception to this would be a DSCR loan which is still considered hard money but it can be a 30 year loan like a regular mortgage
What loan types do you offer?
We offer DSCR loans, Fix and Flip loans, New Construction loans, and Bridge loans for real estate investors. Efundhomes does loans strictly for real estate investors. However if you are interested in buying a home to live in, try www.davidstreitmortgage.com
How do I know which loan is right for me?
Our team reviews your goals and project details to recommend the best loan option for your strategy. Don't worry, Fix and Flip loans you are not required to Flip it. You are required to refinance it, we can refinance your Fix and Flip loans into a DSCR loan which works great for the BRRRR strategy
What is the application process like?
We deal with so many different lenders that all have their own application process. We will try to work with the simplest lender for this. However, depending on the location of your property, the lenders might have different requirements in the application. Usually our loans do not include personal income and employement
How fast can I get approved and funded?
Timelines vary by project, but we move quickly to ensure a smooth, efficient approval and funding process. Commercial and Mixed Use properties take the longest amount of time to complete the loan. Usually a 1-8 family property can close within 30 days or less
Efundhomes LLC — Premier Hard Money Broker for Real Estate Investors
Fast, reliable funding for Fix & Flip, DSCR, New Construction, and Bridge Loans
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