The Ultimate Guide to Owner Builder Construction Loans

Building your own home can be an exciting and rewarding experience. However, it can also be a daunting task, especially when it comes to financing. Owner-builder construction loans are designed to help individuals who want to build their own homes but don’t have the cash to do it outright.

Today, we’ll cover everything you need to know about owner-builder construction loans in the US.

What are Owner-Builder Construction Loans?

Owner-builder construction loans are loans designed specifically for individuals who want to build their own homes. These loans are different from traditional home loans in that they provide funding for the construction of the home rather than the purchase of an existing property.

With an owner-builder construction loan, the borrower is responsible for overseeing the construction process, which means they act as the general contractor. This can be a significant advantage, as it allows the borrower to control the construction process and ensure that the home is built to its exact specifications.

Types of Owner-Builder Construction Loans

There are two main types of owner-builder construction loans: construction-to-permanent loans and construction-only loans.

Construction-to-permanent loans provide funding for both the construction of the home and the permanent mortgage. This means that once the construction is complete, the loan will convert to a traditional mortgage.

Construction-only loans, as the name suggests, only provide funding for the construction of the home. Once the construction is complete, the borrower will need to secure a separate mortgage to pay off the construction loan.

Qualifying for Owner-Builder Construction Loans

Qualifying for owner-builder construction loans can be more challenging than for traditional home loans. Lenders will typically require a higher credit score, a larger down payment, and more documentation to verify income and assets.

In addition, lenders will want to see that the borrower has experience in construction or has hired a reputable builder to oversee the construction process. This is because building a home is a complex process that requires a high level of expertise.

Tips for Getting an Owner-Builder Construction Loan

Here are some tips to help you get approved for an owner-builder construction loan:

1. Start Saving Early

Owner-builder construction loans typically require a larger down payment than traditional home loans. Start saving early, so you have enough money to put down on a loan.

2. Build Up Your Credit Score

Lenders will look at your credit score when deciding whether to approve your loan application. Make sure you have a good credit score before applying.

3. Have a Detailed Construction Plan

Lenders will want to see a detailed construction plan that outlines the scope of work, timeline, and budget.

4. Hire a Reputable Builder

If you don’t have experience in construction, it’s a good idea to hire a reputable builder to oversee the construction process.

5. Shop Around for Lenders

Not all lenders offer owner-builder construction loans. Shop around to find a lender that offers these types of loans and has experience working with owner-builders.


Owner-builder construction loans can be a great option for individuals who want to build their own homes. However, they can be more challenging to qualify for than traditional home loans. If you’re considering an owner-builder construction loan, make sure you do your research and work with a reputable lender who has experience working with owner-builders. With the right preparation and planning, you can build the home of your dreams!

Builder Loans is a construction loan provider that offers the best deals to help everyone get the 100% financing they require. If you are looking for the best owner-builder construction loans, check out what we offer.