Financing
How You Pay for a Custom Build.
Construction lending works differently from a purchase mortgage. Here is the plain version — one loan, funds released as the house goes up, and a normal mortgage at the end.
The Short Version
One loan. One closing. Money released as the home is built.
Most of our clients use a construction-to-permanent loan. You close once. During construction, the bank releases money in stages — called draws — as real work gets completed and inspected: site work, foundation, framing, dry-in, mechanicals, finishes. You're only paying interest on what has actually been drawn, so payments start small and grow with the house.
When the home is finished, that same loan converts into a normal mortgage. No second closing, no second set of closing costs, no scramble to refinance on a deadline.
Here's where our side of it matters: before you sign anything, we put together the land cost, the development cost (grading, drive, well or sewer, utilities), and the full house estimate, and we submit that package to the bank. The lender is underwriting real numbers from a licensed builder — not a guess — so the loan amount reflects what the project actually takes. That's what keeps people from getting halfway up and running out of money.
What You'll Need
Income documentation
Two years of tax returns and W-2s or K-1s, recent pay stubs, and a current statement of assets. Self-employed borrowers usually add a year-to-date P&L.
Credit
Most construction lenders want a mid-score in the low-700s or better. Pull your report early so anything wrong has time to get corrected.
Down payment
Plan on 20–30% of total project cost. Land you already own is typically counted toward that equity.
The land
A lot owned or under contract. If you don't have one yet, we find it — and we can run a feasibility review before you commit.
Our Preferred Lender
Matt DeCesaro
Senior Vice President & LPO Manager · NMLS #865043
The Federal Savings Bank — Member FDIC · Equal Housing Lender
Alpharetta, Georgia · Phone / Text: (404) 358-7313
Matt works with construction and construction-to-permanent loans regularly, which matters more than it sounds — plenty of loan officers have never handled a draw schedule. He knows what to ask us for and how to keep funding on pace with the build.
Start your application directly with Matt. It takes a few minutes and gives you a real number to plan around before we design anything.
Get Pre-Qualified / Apply NowCall or Text MattPrefer We Walk You Through It First?
Tell us where you're starting from.
No credit pull, no application. We'll look at your budget, your land situation, and your timeline, and tell you plainly what's realistic.
Quick Answers
What kind of loan do I need to build a custom home?
Most clients use a construction-to-permanent loan: one closing that funds construction and then converts to a standard mortgage at completion. It avoids a second closing and a second set of costs. A few clients pay cash for the land and finance only the build; some pay cash outright.
How much do I need to put down?
Plan on 20–30% of total project cost, depending on the lender and your profile. Land you already own is usually counted toward equity, which is one reason buying the lot first can reduce the cash you bring to closing.
How does the builder get paid?
Through a draw schedule. The lender releases funds in stages as work is completed and inspected — typically foundation, framing, dry-in, mechanicals, and finish. We bill against completed work, not in advance.
Do I make payments during construction?
Yes, but interest-only on the amount drawn so far. Payments start small and grow as the loan is drawn down, then convert to principal and interest when the house is complete.
What does the lender need from the builder?
License verification, insurance certificates, the signed build agreement, a detailed cost breakdown, and the plans and specifications. We provide all of it. Our license numbers are GA Residential Contractor RBQA007238 and Company RBCO007242.
What happens if costs change mid-build?
We work cost-plus, so changes are visible rather than buried. Approved change orders are documented in writing; if a change exceeds the loan's contingency, the lender needs to approve an increase or you fund the difference directly. We flag that before the work starts, not after.
Compass Signature Homes is not a lender and does not require the use of any particular lender. You are free to choose any lender. The Federal Savings Bank — Member FDIC, Equal Housing Lender.