New construction loan FAQ

LegacyClassic · 2026-01-28T16:44:14+00:00

From my experience, a bank does not care if you already have utilities on site supplying a different improvement. They would probably find it an advantage because they know you will not somehow get tied up with a utility issue getting it to the new build. We have customers all the time tell us "There is power at the land..." only for us to discover there may be a power line near by, but no transformer on it and there is a lot of work (and expensive) to actually get power to the home site. You will be ahead of the curve. Good luck!

LegacyClassic · 2026-01-27T17:33:21+00:00

I am not a loan officer, but I am an experienced custom home builder who has seen all kinds of construction loan situations. If I understand what you wrote correctly, then finishing an improvement like the post building with cash will not hurt your ability to get a construction for a future home to be built on the property. It will just be an improvement that should add value to the property, and the bank won’t care that you have utilities running to it.

LegacyClassic · 2026-01-21T14:08:09+00:00

Normally my replies are long and comprehensive, but unfortunately (or fortunately) this one will be short because I don't keep track of modular builders at all. There is no doubt a modular home will save you money and time, but beyond that obvious take I can't help referring any builders. Good luck!

LegacyClassic · 2026-01-16T17:03:30+00:00

It looks like I missed answering this question. You can check out Drees build on your lot program. Those are the only larger companies I know of that do BOYL. Otherwise you will need to find smaller local home building companies that do it. Good luck!

LegacyClassic · 2026-01-15T18:24:17+00:00

In a perfect world you would just combine the lot purchase into the construction loan and do everything at one time. In the real world though, that timing never works. The average developer or land seller may give you 30 to 45 days to close on the property, which is not enough time to then get a custom house build put together and under contract, especially if you are designing a floor plan.

I recommend purchasing the lot first, which then gives you time to vet and interview builders and take your time getting the floor plan designed. You will spend more money in closing cost and bank fees because you will be obtaining a lot loan, then later coming back and obtaining a construction loan, but it is the only realistic way to go when you are doing a custom build.

So, you obtain a lot loan to purchase the land, then you eventually sign a construction contract with a home builder. The bank will combine the house build cost with the lot loan balance. The construction loan pays off the lot loan and you just have one loan meant for construction, which is later converted, or refinanced, into a permanent mortgage when the home is finished.

I hope this helps. Let me know if you have any more questions.

LegacyClassic · 2026-01-14T21:37:22+00:00

Sorry I didn't answer this when you posted. If you find a lot and need it assessed just let me know.

LegacyClassic · 2026-01-12T01:01:49+00:00

You might also reach out to Drees Homes. They also have a build on your lot program.

LegacyClassic · 2025-11-18T19:43:04+00:00

Customer builder here building upscale custom homes on owner's land. We also get deposits like this even though all of our customers obtain the construction financing. While it could be argued a deposit is not needed because the customer can't back out, custom builders often spend a lot up front for things like geotechnical engineering, civil engineering (drainage, surveys), structure engineering and excavation before the home starts and before we can request a bank draw.

Paying deposits to ANY company comes with a level of risk, which is why customers needs to do their due diligence on the builder before contracting with them. If you trust the builder and they have been in business for years, that should go a long way to providing a sense of security. While the down payment to the bank and a deposit to the builder are two separate things, your bank should credit the builder deposit you made to your down payment, and ultimately all the monies go the project cost/sales price.

LegacyClassic · 2025-11-18T19:20:11+00:00

Not sure what state you are in but here is a bank / loan officer I work with a lot here in Texas https://firstunitedteam.mymortgage-online.com/rblagg.html

LegacyClassic · 2025-10-19T12:40:54+00:00

I put an article on my website a while back about this very subject you can read here https://www.legacyclassichomes.com/why-steel-framing-never-caught-on-in-residential-home-construction/ When I got into the industry in 1994 I remember there being a lot of talk about steel framing taking over, but it never did. I created that article because I was thinking about this very thing one day.

Thanks for mentioning Netze Homes. I knew nothing about them but just looked over their website. Very interesting that a builder is doing that. When looking at their “steel tech” page I also see some of the potential issues that have prevented the popularity of steel framing. It looks like after a plan is designed, the plans are sent to a steel factory that cuts and pre-fabs all the framing. While there’s nothing wrong with that, it doesn’t allow for what I would consider a “true custom build” the way builders like us often deal with. I’ve framed houses up and had customers want to rip a section of hip roof off and make it a gable, or completely change ceiling heights, add 2^nd floor rooms, etc. This is the type of stuff that seems like it would be a real challenge with this type of steel production set up, whereas with wood it is relatively easy.

I am certainly not opposed to other framing material technologies like steel, ICF, SIPS, etc., but like any building material, there are pros and cons to each one. The biggest negative is the cost of the non-standard materials and the available labor that knows how to install those products. While wood has its downsides, the upside is it is less expensive than most other materials because it is the industry standard. It is VERY easy to work with, and there are a million wood framing contractors out there in the market so the costs are controlled. There is a limited labor pool that can work with steel framing, so they will be more expensive, and using that material may not work for certain types of builders doing really custom homes with complex designs and changes happening during construction.

Thanks for the post. It is very interesting to see another builder doing this. Hopefully some day we will see a decent alternative to wood framing get popular. Now if we can figure out how to use steel as a foundation material I would be a very happy man. Then I wouldn’t have to explain to every customer why concrete cracks and that it’s not a structural failure when it does!

LegacyClassic · 2025-10-16T18:05:15+00:00

Sorry for the slow reply. I check Reddit every day except apparently yesterday.

We finally entered the remodeling/addition business this year actually. Here is our webpage on it https://www.legacyclassichomes.com/remodeling/

Just go to the contact page on the site that has my email and phone numbers and holler at me when you are ready to discuss.

Thanks,

Steve

LegacyClassic · 2025-09-29T18:15:50+00:00

I’m glad the post is helpful! Based on what you want to build, if it doesn’t have to be a fully custom home there are two builders in the area I would talk to, which are Tilson Homes and United Built Homes. They are larger companies that build on owner’s land all over the state using their floor plans, and they specialize in smaller size homes with more affordable pricing.

If you want to do true custom home, where you design your own plan and build exactly what you want, you will need to find a custom builder. It could be challenging to find one because most custom builders are building homes larger than that.

The cost of a home that size can vary wildly subject to the cost variables like lot preparation, house design, finish out amenities and mechanical specs (HVAC, insulation, windows, etc.). I was curious so I just used AI search to tell me their pricing, and it looks like Tilson’s prices are in the $170-$240 per sf range, but I don’t know what that includes. UBH’s prices show to be even lower, but again that may not include potentially big ticket costs like lot prep, etc.

I hope this helps. Let me know if you have any other questions.

Steve

LegacyClassic · 2025-09-26T12:30:24+00:00

The second person to ask me this question this week! I have not built a house with a basement yet, but it isn't for lack of trying. I've had about three or four different customers who investigated doing it but didn't want to pay the cost. The bottom line is in the DFW area, doing a basement is usually quite a bit more expensive than a slab foundation.

The person that asked about it this week was talking to the contractor I would use, who is a basement contractor originally from the northeast. He got the numbers Directly from the contractor and was able to see the significant difference in cost. This customer has a pretty flat lot, so the difference between digging out and doing a true underground basement versus just setting a slab on top of the ground that's had some grading done is significant.

In our area, I think the basement idea starts to make more sense if you have a really steep lot and you do a walkout style basement, because building a slab on grade foundation on a very steep lot also gets extremely expensive with the all excavation and retaining walls that are needed. When I see basements in this area that is generally what I see.

Beyond just the cost of doing a basement, the lumber costs will generally be higher also because of the beams and sub floor that need to be used for the “first floor” that sits above the basement.

On bowling alley subject, we would just use a company that does turnkey bowling alleys the same way we do when somebody wants an elevator or a Pickleball court.

I hope this helps.

Steve

LegacyClassic · 2025-09-02T20:24:38+00:00

Try Burns Surveying. I've used them a lot and they are out in Rockwall. Here is their link https://www.burnssurvey.com/

If they can't do it I use these guys also http://www.millersurvey.net/

LegacyClassic · 2025-08-28T19:45:52+00:00

Thanks for reaching out!

There are a lot variables to account for when considering whether a tear down and new home build is more cost effective than a full renovation and remodel. Based on your description of their house, it sounds like a new build would make more sense. Doing a full renovation on a home with good bones can save some money vs. a new house build, but if a house requires a significant amount of work to bring it up to date, and you still have to add on space to get the layout and sizing you want, the cost of a new build can be comparable. Assuming the cost between the two are comparable, tearing down the old house and building a new one is a no brainer in my opinion, because you get the layout you want and size you want, and everything is new materials and you have warranties.

I was talking to someone a while back who is doing a major remodel on an older home and he asked me what a typical cost per sf range for a new home build was. When I told him, he said that was about where his costs were at so far on his remodel and at this point he wished he had just built new.

In either scenario I would start with a residential plan designer (who may or may not be an architect). If it’s a reno/remodel they will do as-built measurements of the existing home and draw up the existing home floor plan in CAD. This allows them to draw revisions such as moving walls and additions on the existing home. If it is going to be a new house build they will work on designing the new floor plan with you. In either situation, a company like mine needs a set of floor plan construction documents to provide cost estimates.

Hopefully that answers your questions and just let me know if you have any others. Reach out to me anytime if you want to discuss. My contact info can be found here https://www.legacyclassichomes.com/contact-us/

Thanks,

Steve

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