7 Best Construction Mortgage Lenders of June 2024

Not every mortgage provider offers construction loans. We've chosen home construction lenders that rank among the best in several categories.

Kate Wood
Written by
Last updated on April 1, 2024
Edited by
✅ Fact checked and reviewed
Mary Makarushka
Edited by
✅ Fact checked and reviewed

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7 Best Construction Mortgage Lenders of June 2024

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Lender
NerdWallet Rating
Min. credit score
Min. down payment
Learn more
New American Funding

New American Funding: NMLS#6606

Top 3 most visited 🏆
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at New American Funding
at New American Funding
Home loans overall
Best for customer satisfaction

580

3%

Flagstar

Flagstar: NMLS#417490

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on NerdWallet
5.0
/5
Home loans overall
Best for rate transparency

620

3%

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on NerdWallet
US Bank

US Bank: NMLS#402761

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on NerdWallet
4.0
/5
Home loans overall
Best for jumbo lending

620

5%

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on NerdWallet
Wintrust Mortgage

Wintrust Mortgage: NMLS#449042

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on NerdWallet
4.0
/5
Home loans overall
Best for first-time home buyers

620

3%

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on NerdWallet
Movement Mortgage

Movement Mortgage: NMLS#39179

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on NerdWallet
3.0
/5
Home loans overall
Best for variety of loan types

620

3%

LEARN MORE
on NerdWallet
New American Funding
Learn more
at New American Funding
at New American Funding
New American Funding

New American Funding: NMLS#6606

4.0
Home loans overall
NerdWallet rating
Min. credit score

580

Min. down payment

3%

Why We Like ItGood for: first-time home buyers, military members and self-employed or underrepresented borrowers.
Pros
  • Offers a wide variety of purchase and refinance mortgages with an emphasis on helping underserved communities.
  • Its home equity line of credit can be used for an owner-occupied or second home.
  • Has a program to enable buyers to make cash offers.
  • Receives high marks for customer satisfaction, according to J.D. Power and Zillow.
Cons
  • Mortgage origination fees tend to be on the high end.
  • Personalized mortgage rates are not available on the website without providing contact information.
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Flagstar
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on NerdWallet
Flagstar

Flagstar: NMLS#417490

5.0
Home loans overall
NerdWallet rating
Min. credit score

620

Min. down payment

3%

Why We Like ItGood for: Borrowers who may benefit from Flagstar’s unique loan options, such as ITIN loans, loans for manufactured homes or physician loans.
Pros
  • Multiple loans for those who are renovating or building a home, including loans with interest-only payments during construction.
  • Offers home equity loans and lines of credit.
  • Offers down payment assistance and loans for underserved borrowers, including ITIN loans and loans with flexible qualifications in certain communities.
  • Interest rates are on the low side relative to other lenders, according to the latest federal data.
  • Borrowers can enter their information (including their desired loan amount, down payment and zip code) into the lender’s Mortgage Quote Comparison tool and receive a customized rate quote.
Cons
  • Home equity loans are not available in all locations served by Flagstar.
  • In 2022, the lender was fined for violating laws regarding properties in flood zones.
US Bank
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on NerdWallet
US Bank

US Bank: NMLS#402761

4.0
Home loans overall
NerdWallet rating
Min. credit score

620

Min. down payment

5%

Why We Like ItGood for: borrowers who are financing home improvement projects.
Pros
  • Offers a range of loan types, including FHA loans, VA loans and home equity options.
  • Lists sample mortgage rates and APRs for many of its products online, including a breakdown of estimated monthly payments.
  • Their mobile app is highly rated in the App Store.
Cons
  • Sample mortgage rates are not customizable, and many estimated conventional and jumbo rates assume a down payment of at least 25%.
  • We were unable to contact a representative by phone.
  • Lender site does not have a live chat feature.
Wintrust Mortgage
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on NerdWallet
Wintrust Mortgage

Wintrust Mortgage: NMLS#449042

4.0
Home loans overall
NerdWallet rating
Min. credit score

620

Min. down payment

3%

Why We Like ItWintrust Mortgage offers a variety of loan products, including home equity lines of credit and even home-improvement loans, and provides a number of online conveniences, such as loan process updates. But you won’t find rates posted online.
Pros
  • Offers a broad variety of government-backed mortgages and other loans.
  • Participates in first-time home buyer assistance programs in Illinois and Wisconsin.
Cons
  • Sample rates for some loan products are available only by contacting a loan officer.
  • Physical locations aren't available in all states.
Movement Mortgage
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on NerdWallet
Movement Mortgage

Movement Mortgage: NMLS#39179

3.0
Home loans overall
NerdWallet rating
Min. credit score

620

Min. down payment

3%

National / regional

National

Why We Like ItGood for: borrowers seeking government-backed mortgages or loans for condos, home renovation or construction, especially if speed is an important factor.
Pros
  • Loans can be processed in as little as seven days, the lender says.
  • Offers renovation loans and home equity lines of credit.
  • Movement Boost program can help FHA borrowers with down payment and closing costs.
Cons
  • Borrowers cannot browse sample mortgage rates online.
  • Mortgage rates and fees are on the high side, according to the latest federal data.
  • Recent government regulatory action could affect consumer confidence.
PrimeLending
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on NerdWallet
PrimeLending

PrimeLending: NMLS#13649

3.0
Home loans overall
NerdWallet rating
Min. credit score

620

Min. down payment

3%

Why We Like ItGood for: those seeking to buy a fixer-upper, build a new home or make renovations.
Pros
  • Offers a broad selection of renovation loans to finance cosmetic upgrades or structural repairs.
  • Issues loan approval letters within 24 hours to borrowers who qualify.
  • Offers resources to connect eligible borrowers with closing cost and down payment assistance programs.
Cons
  • No online mortgage rates — you have to contact the lender for information.
  • Rates and fees are on the high side, according to the latest federal data.
  • Doesn't offer home equity loans or lines of credit.
Alliant
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on NerdWallet
Alliant

Alliant: NMLS#197185

4.5
Home loans overall
NerdWallet rating
Min. credit score

N/A

Min. down payment

3%

Why We Like ItGood for: eligible borrowers who are open to joining a credit union and want a mortgage from an online lender.
Pros
  • Borrowers can apply entirely online. The lender is also very transparent about what borrowers can expect from the process, including nontraditional customers.
  • Borrowers do not need to become members of the credit union until they’ve reached the closing process, meaning that interested home buyers can apply and get rate offers without committing to membership.
  • Offers customized rate quotes, including a detailed breakdown of estimated closing costs.
Cons
  • Doesn’t offer renovation loans.
  • Joining the credit union adds a step to the application process.

What type of loan is best for building a house?

While a traditional mortgage finances buying a house, a construction loan provides money for building a house. Construction loans have shorter terms and higher interest rates than traditional mortgages. The lender pays the loan proceeds in installments to the contractor as building progresses. Once the home is completed, the construction loan is paid in full or converted to a permanent mortgage.

Types of construction loans

There are a few types of home construction loans:

  • A construction-to-permanent loan, also known as a "single-close" construction loan, becomes a permanent mortgage when the home is complete.

  • A construction-only loan, also known as a "two-close" loan, is paid off when building is finished. Unless you have ample cash to pay off the loan, you'll need to shop for a traditional mortgage during the building process.

  • Renovation construction loans include the cost of major renovations in the mortgage. The total loan amount is based on the value the home will have once the construction work is done.

Is a construction loan harder to get than a traditional mortgage?

Getting approved for a construction loan is generally more difficult than getting approved for a traditional purchase mortgage because there isn't a completed house to secure the loan during the building phase. A typical down payment is 20%, although a lower down payment may be allowed with some programs. Credit score requirements vary by type of loan and lender. A credit score of 720 or above is typically sufficient.

If you are buying a home that's being built by a developer, rather than a builder you've hired on your own, the developer will likely offer you either direct financing or a loan through a lender they've partnered with. While working with the developer's preferred lender may make parts of the process easier, it's worth comparison shopping different construction loans to make sure that you aren't trading considerable cash for a bit of convenience.

More from NerdWallet

Last updated on April 1, 2024

Methodology

The star ratings on this page reflect each lender's overall star ratings. Read more about how we determine those ratings.

The lenders on this page are chosen using this methodology:

NerdWallet reviewed more than 50 mortgage lenders, including the majority of the largest U.S. mortgage lenders by annual loan volume (measured among lenders with at least a 1% market share), lenders with significant online search volume, and those that specialize in serving various audiences across the country.

For inclusion in this roundup, lenders must originate construction loans to build a house, offer consumer-oriented information about construction loans on their websites, and achieve at least an overall 3-star rating from NerdWallet.

NerdWallet solicits information from reviewed lenders on a recurring basis throughout the year. All lender-provided information is verified through lender websites and interviews. We also used 2022 HMDA data for origination volume, origination fee, average interest rate and share-of-product data.

To recap our selections...

NerdWallet's Best Construction Mortgage Lenders of June 2024

  • New American Funding: Best for customer satisfaction
  • Flagstar: Best for rate transparency
  • US Bank: Best for jumbo lending
  • Wintrust Mortgage: Best for first-time home buyers
  • Movement Mortgage: Best for variety of loan types
  • PrimeLending: Best for custom homes
  • Alliant: Best for credit union lending
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