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Home Construction Loans

Home Construction Loans At State Savings Bank

Hands gently framing two wooden house models, symbolizing protection and support for home construction financing from State Savings Bank.

Building Your Home With Confidence

Building a home marks an important life moment shaped by personal goals, community ties, and future plans. State Savings Bank brings a community driven approach to construction lending, offering guidance grounded in trust, clarity, and local experience throughout the building process.

Construction loan options are available online and in person to support planning, active building, and long term financing. Knowledgeable loan professionals provide steady support, helping simplify decisions and create a comfortable, familiar experience from start to finish.

Lot Loan Options

A lot loan is a practical option for purchasing land when home construction is planned for a later date. This type of financing provides flexibility while giving buyers time to prepare designs, select builders, and plan next steps at a comfortable pace.

Construction starting within twelve months allows for interest only payments
Construction starting after twelve months uses amortized payments that build equity over time

This structure supports careful planning and financial stability before construction begins.

Construction Loan Solutions

For those prepared to begin construction immediately, a construction loan is designed to support the building phase from start to finish. This financing option allows costs to be managed gradually, with interest only payments based on funds as they are disbursed.

Key features include:

Loan amounts are determined by construction costs and the appraised value of the home
Appraisals based on submitted plans and builder specifications
Funds available up to twice per month to help keep construction moving on schedule

Permanent Loan Financing

Long term mortgage financing marks the final phase of new home construction. Since an origination fee applies earlier during construction financing, no additional origination fee applies for permanent financing through State Savings Bank.

Interest rates may be locked before construction completion
A final appraisal confirms the value of the completed home
Move in may occur once the city issues an occupancy permit, even if permanent financing has not yet closed

Loan Resources And Local Support

State Savings Bank offers diverse loan options, including personal loans, home improvement financing, and savings tools. Helpful resources include loan calculators, checking accounts, savings accounts, and tax advantaged savings programs for qualifying first time homebuyers. As a full service Iowa bank serving Polk County, Jasper County, and nearby communities, trust and familiarity remain core values.

Request Pricing And Next Steps

Competitive home construction loan rates remain available for Iowa residents across surrounding counties. Reach out today and speak with a knowledgeable construction loan expert. Schedule an appointment, ask questions, and start planning a home built with care, guidance, and genuine local support.

Home Construction Loans Frequently Asked Questions

What is the loan structure of a construction loan?
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.
How does a mortgage loan differ from a construction loan?
A major difference between a regular mortgage loan and a 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.

A second difference is the way the money is disbursed. With a mortgage, funds are disbursed all at once when the mortgage is approved and the homeowner is ready to move in. In the case of a construction loan, the loan is approved before construction begins, and the money is disbursed in phases as construction progresses. Interest is only charged on the amount disbursed.
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 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.
If I own my lot/land, does my equity count towards my construction loan down payment?
Yes. The equity you have in the lot/land you want to build your home on counts towards the 20% down payment required for the construction loan.
What are my monthly payments on a construction loan?
Monthly payments on a construction loan are interest-only based on the amount advanced on the loan. In the beginning, your monthly payments will be less but will steadily increase as construction progresses and more money is drawn off the loan. You can calculate an approximate interest-only payment in the following way: Multiply the dollar amount advanced on the loan by the interest rate expressed as a decimal, and then divide that amount by 12. This is not an official calculation, it will not equal your exact payment and is not legally binding, it is simply a way for you to estimate what your construction loan payments might look like as your home construction progresses.