Construction Loans

State Savings Bank offers several home financing, home mortgage, and new construction loan options in Baxter and the Des Moines metro for customers who want to build a new home. From lot loans, to new constructions loans, to permanent long-term financing, our Des Moines metro and Baxter locations can finance both the construction phase and your home mortgage. Our loan experts guide you throughout the entire process and can save you time, money and stress by financing everything from start to finish.

Request Pricing

Our low home construction and home mortgage loan rates are highly competitive in our market area of the Des Moines metro and Baxter. Please contact a State Savings Bank construction loan expert to schedule an appointment or discuss rates and other details at one of the following numbers:  Baxter:  641-227-3161 or West Des Moines: 515-457-9533.

Lot Loan

If you’ve decided to purchase a lot but you’re not ready to begin home construction, a lot loan gives you flexibility. Your loan repayment depends on your construction time schedule.

• If construction is set to begin within 12 months of the lot purchase, your payments will be interest only.
• If construction is set to begin more than 12 months after the close of the lot purchase, your payments will be amortized allowing you to gain equity as you prepare for construction.

Construction Loan

If you’ve decided to purchase a lot and you are ready to begin construction immediately, a construction loan is typically our recommended option.  You pay a loan origination fee, a down payment and other applicable fees, but your loan repayment is interest only based on the amount of money advanced.

• Your allowable construction loan amount is determined by the cost of construction and the home’s appraised value as determined by a certified appraiser based on the house plans and specs you or your builder provide.
• Loan advances on the construction loan can be made up to twice a month.

Permanent Loan

Obtaining long-term mortgage financing on completion of construction, is your final step. Because an origination fee has already been collected on your new construction loan, we charge no additional origination fee when you obtain long-term financing through us.

• Your construction loan interest rate can be locked in prior to completion of the home.
• Upon conclusion of construction, a final appraisal determines the value of your completed home.
• You can move in as soon as the city issues an occupancy permit, regardless of whether your permanent loan has closed.

Frequently Asked Questions

The following FAQs provide general answers to common questions about new construction loans.

What do I need for a construction loan?

The biggest difference between a regular home mortgage loan and a home construction loan is the need for plans and specs of the house you plan to build. Plans are the building blueprint or drawing of the house; specs are the cost breakdown for its construction. For example, how much will the foundation cost? It is important to obtain the plans and specs as soon as possible in the construction loan process because your lender needs to give this information to an appraiser to determine the "as-completed" value of the house to be built.

What is the loan structure of a construction loan?

Home construction loans are ‘closed-end lines of credit,’ meaning you advance money off the loan as you build the house.  It is not a revolving line of credit like a credit card where you advance off the line, pay it down, and then advance off the line again.  Payments on the construction loan are monthly interest only, so at the beginning of the loan you pay a smaller amount of interest than you do at the end when you have more money drawn off the line.

Can I be my own General Contactor (GC)?

State Savings Bank does allow individuals to work as their own GC as long as they have relevant construction experience. A resume or proof of previous houses built may be required.

How do construction draws work?

SSB requires invoices from the GC and sub-contractors for each construction draw as well as fully executed lien waivers on work previously completed.  SSB lenders will also make regular inspections of construction in order to verify the work we are advancing for has been completed.  This is done in order to protect both the borrower and the bank.

At what point can I lock in an interest rate on my end loan?

In general, we recommend locking in the construction loan interest rate on your end loan (15 or 30 year fixed rate loan) when your house is 30 days from being 100% complete.  The maximum interest rate lock period is 60 days, so the final 30 days of construction takes up the first half of the rate lock period and the second half of the rate lock period allows time for the appraiser and underwriting to take place.  Communication between the lender, homeowner, and builder are very important in this phase to avoid paying interest rate lock extension fees.

I currently own the lot/land that I want to build my house on. Does my equity in my lot/land count towards my 15% down payment on my construction loan?

Yes. The equity you have in your land counts towards the 15% down payment required for the home construction loan.