Construction Loans in California: Ground-Up and Renovation
Ground-up construction and renovation financing. One-time close and two-time close options. Fund your build from lot purchase to completion.
Overview
Building a custom home in the East Bay, adding an ADU, or taking a house down to the studs needs a loan that funds in stages as the work is done. Construction financing does that, releasing draws against inspections, then converting to (or being replaced by) a permanent mortgage when the certificate of occupancy is issued.
Build your dream home from the ground up or take on a major renovation with our construction financing programs. We offer one-time close (construction-to-permanent) and two-time close options to fund every phase of your project.
Program Features
- One-time close construction-to-permanent
- Two-time close options
- Lot purchase financing
- Draw schedule management
- Builder approval assistance
- Renovation and addition financing
Ideal For
Custom home builders, major renovation projects, lot buyers planning to build, and owner-builders.
One-time close vs. two-time close
A one-time-close (construction-to-permanent) loan funds the build and automatically converts to your permanent mortgage, with one application, one closing and one set of fees. A two-time-close structure uses a separate construction loan, then a new permanent loan at completion, which can offer more flexibility on the permanent financing. We price both so you can compare.
What lenders require
Plans and specifications, a detailed budget, a licensed and insured general contractor (owner-builder is allowed by a few lenders), an appraisal based on the completed value, and the borrower's credit, income and reserves. Lot purchase can be included in the loan. Draws are released after inspection at each stage of construction. Subject to credit approval; programs vary by lender.
Renovation and ADU financing
For major renovations and accessory dwelling units, renovation loans (FHA 203(k) and conventional renovation programs through select lenders) finance the purchase or refinance plus the improvement budget in one loan, based on the after-completion value. Investors rehabbing to sell should look at our fix-and-flip programs instead.
Construction Loan FAQs
Can the loan include buying the lot?
Yes. Lot acquisition can be rolled into a construction loan, or an existing lot you own can count toward your equity.
How are construction funds released?
In draws tied to construction milestones, after an inspector confirms the work is complete. Interest is charged only on funds drawn.
Can I finance an ADU?
Yes, through renovation and construction programs that lend on the completed value including the new unit.
Do I need a general contractor?
Most lenders require a licensed and insured general contractor. A few allow owner-builders with relevant experience.
What happens when construction is finished?
On a one-time-close loan, it converts to your permanent mortgage automatically. On a two-time-close, we arrange the permanent loan to replace the construction loan.
Programs, terms and eligibility vary by lender and are subject to credit approval. This is not a commitment to lend. SiFi Lending is a mortgage broker (Simonich Financial, Inc., NMLS #2563307); we arrange loans, we do not make loans. Equal Housing Opportunity.