Construction Loans

Financing the construction of a new home does not have to be complicated. Our construction loan specialists have the experience to guide you through the construction financing process. We make loans to individuals for their dream home or to the contractor for their custom pre-sold or spec project.

Length of Construction Loans

Most home construction loans are six months in length. If the time necessary to construct your home is longer or shorter, we can adjust the term of the loan accordingly.

Contractor

Constructing a home is a complex undertaking, but it doesn’t have to be difficult. Your Idaho Banking Company loan specialists require the use of a qualified contractor - part of our process is to research and understand your builder’s resume and work history. In certain circumstances, we will make exceptions for owner/builders who demonstrate adequate building experience. We will work closely with the builder to ensure that the process runs smoothly and that the project is completed on time, as specified.

Draws and Inspections

We advance funds for construction according to the level of progress at certain points in time. These advances are known as “draws”. There are typically four to six draws requested during the term of the construction loan. Prior to funds being advanced, the bank will send a representative to the project to inspect the project and verify that the draw requested agrees with the on-site progress.

Payments During the Term of the Construction Loan

During the construction period, accrued interest will be collected on a monthly basis. This interest is based on the amount that has been advanced on your loan. The bank will provide you with monthly billings.

Completion

One of the first steps that your Idaho Banking Company construction loan specialist will take you through is qualifying for your “takeout” or “permanent” mortgage loan. This is the loan that will remain in effect for an extended period of time and will pay off your short term construction financing. At approximately thirty to forty-five days before construction is complete, your loan specialist will discuss the final process for “locking in” the best possible rate for your permanent financing.