Construction Loans in Houston

One-time close (construction-to-permanent) combines construction and permanent financing into one loan with one closing, one set of fees, and locked permanent rate. Two-time close requires a separate construction loan first, then refinancing into a permanent mortgage when complete - this means two closings, two sets of fees, and potential rate changes. One-time close saves money and protects you from rate increases.

Most custom homes in Houston take 6-12 months to build, depending on size, complexity, weather conditions, and material availability. Simple homes (2,000-3,000 sq ft) may take 6-8 months. Larger luxury homes (4,000+ sq ft) with custom features typically take 10-12 months. Your builder will provide a detailed construction timeline during the planning phase.

Owner-builder construction loans are available but have stricter requirements and higher rates. You'll need to demonstrate construction experience, project management capability, and have proper licensing/insurance. Most lenders require you to have built at least one home previously. We evaluate owner-builder scenarios on a case-by-case basis.

Budget overruns must be covered by the borrower, as the loan amount is fixed at closing. This is why it's critical to have a realistic budget with a 10-15% contingency built in. Work with experienced builders who provide accurate estimates and include a contingency fund in your initial budget. Change orders during construction are the most common cause of overages.

You cannot live in the home being constructed for safety and insurance reasons. However, if you own land with an existing home, you may be able to continue living in the existing structure while building a new home on the same property (tear-down and rebuild scenarios). Discuss your specific situation with your loan officer.