1x and 2x close options
Construction Loans
Financing to build a new home, with one-time close or two-time close options depending on your situation.
A construction loan finances the building of a new home. With a one-time close (single-close) construction loan, your construction financing and permanent mortgage are combined into a single loan and closing - you lock your rate once and don’t need to requalify or close again once the home is finished.
A two-time close construction loan separates the process into two loans: a short-term construction loan to build the home, followed by a separate permanent mortgage once construction is complete. This can offer more flexibility in some scenarios, though it does mean two closings.
We’ll help you decide which approach makes sense for your build timeline and budget.
One-time or two-time close at a glance
| One-time close | Two-time close | |
|---|---|---|
| Closings | One | Two |
| Rate | Locked once, up front | Permanent rate set when the home is done |
| Requalifying | Not needed at the end | Needed for the permanent loan |
| Best for | Certainty and simplicity | Flexibility, or if rates may drop |
How building with a construction loan works
- Get prequalified so you know your budget before you finalize plans.
- Choose your builder. Lenders review and approve the builder, plans, budget and contract.
- Appraisal. The home is appraised based on its value once finished.
- Close and start building. Funds are released in stages, called draws, as work is completed and inspected.
- Move in. With a one-time close, your loan simply converts to a regular mortgage. With a two-time close, you close on the permanent loan.
During construction, you usually pay interest only on the amount drawn so far.
Building on land you own
If you already own the lot, its equity can often count toward your down payment. That’s common in Colorado for buyers who bought land first and are ready to build.
Common questions
What loan types allow construction?
Construction financing is available with conventional, FHA, VA and jumbo options, depending on the lender.
What if the build goes over budget?
Lenders usually expect a contingency in the budget. We’ll help you plan for it.
Can I be my own builder?
Most programs require a licensed builder. A few allow owner-builders with experience. Ask us about your situation.
Planning to build? Call us at 303-931-3239, or get prequalified online.