You will need strong credit and a down payment of 20% to 25%. The specific down payment requirement is determined by the cost of the land and planned construction. If you already own the land, you can use it as equity for your construction loan. Your lender will check the credit and credentials of your builder as well.
People also ask, is a construction loan secured or unsecured?
Commercial Real Estate Construction Loans are typically secured by a first mortgage or deed of trust and backed by a purchase or takeout agreement from a permanent lender.
Furthermore, do you have to put 20 down on a construction loan? Traditionally financed construction loans will require a 20% down payment, but there are government agency programs that lenders can use for lower down payments. Lenders who offer VA and USDA loans are able to qualify borrowers for 0% down. For FHA loans, your down payment could be as low as 3.5%.