Maryland Buyers · NMLS #2656628

Construction Loans for Maryland Buyers. Build Your Home With One Closing.

Build your dream home in Maryland with a construction-to-permanent loan. One closing and one set of closing costs covers construction, then automatically converts to your permanent mortgage. Available with conventional financing and VA 100% financing for eligible veterans with $0 down. From acreage in Calvert and Charles County to infill lots across the state, Ken helps you finance the build the right way.

📅 Discuss Construction Financing Get Pre-Approved →

One closing only VA option with $0 down Rate locked before the build Interest-only during construction

Ken Powell

Mortgage Loan Officer · Fairway Home Mortgage

NMLS #2656628 · Equal Housing Lender

How It Works

Construction-to-Permanent: One Loan, Two Phases.

A construction-to-permanent loan solves a key problem. Traditional construction loans require two closings, one when construction starts and another when it is complete. That means two sets of closing costs, two rounds of paperwork, and rate uncertainty on the permanent loan. With a construction-to-permanent loan you close once. Your rate is locked at the initial closing. During construction you pay interest only on the funds drawn, so your payment stays low while the home is being built. Once construction is complete and the certificate of occupancy is issued, the loan automatically converts to your permanent mortgage. The big advantage: you know your permanent rate before the first nail is driven.

🔨 Phase 1: Construction (est. 8 to 12 months)

Example: land plus build cost of $500,000
Down payment of 10%: $50,000 (or $0 with VA)
Loan amount: $450,000
Monthly payment: interest only on drawn funds
Funds released in draws as milestones pass inspection

🏠 Phase 2: Permanent Mortgage

Loan automatically converts, with no second closing
Rate was locked at the original closing
Standard principal and interest payment begins
30 or 15-year fixed terms available

Two Programs

Conventional & VA Construction Loans.

🏗️

Conventional Construction Loan

The standard construction-to-permanent program for Maryland buyers. One closing, rate locked upfront, and interest-only payments during construction. Once the certificate of occupancy is issued, the loan converts to a conventional mortgage with no second closing required.

Minimum credit score: typically 680 plus
Down payment: 5 to 20%. With 20% down, no PMI
Property types: primary residence and second home
Builder requirement: licensed, lender-approved builder

5-20% down · 680+ credit

🎖️

VA Construction Loan

One of the most powerful and underused VA benefits, and one Ken makes sure Maryland veterans know about. Eligible veterans and active-duty service members can build a brand new home with $0 down, using the same VA entitlement as a standard purchase loan. No PMI, competitive rates, and the funding fee can be financed. It is waived entirely for veterans with a qualifying disability rating.

Down payment: $0, none required
Minimum credit score: typically 620 plus
Property type: primary residence only
Builder requirement: VA-approved builder

$0 down · Veterans & active duty

The Process

From Approval to Move-In: The Full Timeline.

1️⃣

Initial Consultation

Discuss your build plans, budget, and timeline with Ken. He confirms your program eligibility and outlines what your builder will need to provide.

2️⃣

Approval & Future-Value Appraisal

Full application with income, credit, and assets, plus the builder contract, construction plans, specs, and timeline. The appraiser reviews the plans to determine the home's projected value upon completion. Approval typically takes 30 to 45 days.

3️⃣

One Closing, Rate Locked

Sign closing documents. Your rate is locked, construction funds are committed, and the build can begin.

4️⃣

Construction Draws

Funds are released in stages as construction milestones are reached and inspected. You pay interest only on drawn funds, which keeps payments low during the build.

5️⃣

Certificate of Occupancy

Construction is complete and the local government issues the certificate of occupancy confirming the home is ready to live in. In Charles County, remember the fair share school excise tax applies to new residential construction. Ken factors it into your numbers up front.

🎉

Loan Converts, You Move In

The construction loan automatically converts to your permanent mortgage. No second closing. Your standard monthly payment begins. Welcome home.

Frequently Asked Questions

Construction Loan Questions, Answered.

How does a construction loan work in Maryland?+

A construction-to-permanent loan covers the cost of building your home and then automatically converts to a permanent mortgage when construction is complete, all in one closing. During construction you pay interest only on drawn funds. Once the certificate of occupancy is issued, the loan converts at the rate you locked at closing.

Can I build a home in Maryland with a VA loan and $0 down?+

Yes. Eligible veterans and active-duty service members can build a new home with no down payment, no PMI, and competitive rates. The VA funding fee can be financed into the loan and is waived entirely for veterans with a qualifying disability rating. As a retired Navy veteran, Ken walks you through the entitlement details personally.

What credit score do I need for a construction loan?+

Conventional construction loans typically require 680 plus credit. VA construction loans typically require 620 plus for eligible veterans. Construction loans have slightly higher credit requirements than standard purchase loans because the lender is financing a home that does not yet exist.

Do I need a specific builder?+

Yes. Conventional construction loans require a licensed builder who meets lender approval criteria, and VA construction loans require a VA-approved builder. Ken helps you understand what documentation your builder needs to provide and what the approval criteria look like so there are no surprises.

What do I pay during the construction period?+

During construction you pay interest only on the funds that have been drawn. Since draws happen in stages as work is completed, your payment starts low and increases as more of the loan is disbursed. This is far more manageable than paying rent and a full mortgage payment at the same time during the build.

How early should I start the financing conversation?+

As soon as you have a builder selected, or even before. You will need a signed builder contract, construction plans and specs, a build timeline, and builder's risk insurance in addition to standard mortgage documents. Starting early keeps your build schedule from waiting on your loan.