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Preferred Lenders
Using one of Keel Custom Homes' preferred lenders minimizes delays and ensures a smooth lending experience — and you'll receive a $10,000 credit when you finance with one of our preferred, top-rated lenders.
Preferred Lenders
Lenders who know new construction
New construction lending is a highly specialized field — with its own language, timelines, and complexities. These are the teams we trust with our clients, and financing with any of them earns you a $10,000 credit toward your build.
The Greg Cowart Team
Greg Cowart & Jesse Perrone
Top 1% of mortgage originators nationwide
With a combined 36 years of experience, Greg and Jesse are trusted leaders in the mortgage industry — consistently ranked in the Top 1% of mortgage originators nationwide. Both are lifelong Virginians with deep roots in Richmond.
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First Heritage Mortgage
Joe Dunn
EVP, Southern Virginia Regional Sales Manager
Joe Dunn brings a wealth of experience and dedication to his role as EVP, Southern Virginia Regional Sales Manager, based in Richmond, Virginia. As his clients like to say: it's a Dunn deal!
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Arbor Home Loans
Evan Rutherford
Construction lending since 2016
A William & Mary finance graduate, Evan has been a top producer in mortgage lending since 2016, known for exceptional customer service. He lives in the Midlothian area with his wife and young son.
Explore →Preferred lender credit
Receive a $10,000 credit when using one of our preferred, top-rated lenders.
Learn more about loans
What is a construction loan?
A construction loan is a short-term loan used to finance the building or renovation of a home, with funds disbursed in stages as work progresses. It typically has higher interest rates, interest-only payments during construction, and requires detailed plans and builder approval. Once the home is complete, it's often converted into a permanent mortgage.
That's the key difference from a traditional mortgage — a long-term loan with lower rates used to purchase an existing home. For a custom build, there are two common structures:
- Construction-only loan — a short-term loan (generally a year) that finances just the building phase.
- Construction-to-permanent loan — converts into your mortgage once the home is complete.
Rates
Why construction loan rates run higher
Construction loan rates typically range from 1% to 2% higher than traditional mortgage rates. If a conventional mortgage is around 6%, a construction loan might range between 7% and 8%. Four reasons why:
Higher risk for lenders
The home doesn't exist yet, so there's no finished collateral behind the loan.
Short-term nature
Most construction loans run just 6–18 months.
Variable rates
Rates usually float with the market during the build.
More oversight
Inspections, draw schedules, and project monitoring all add lender cost.
Qualifying
Qualifying for a construction loan
What lenders typically look for:
Credit score
Most lenders require a minimum credit score of 680–720.
Down payment
Usually 20% to 25% of the total project cost (land + construction).
Debt-to-income ratio
Lenders typically want to see a DTI ratio of 45% or less.
Construction plan
Blueprints, specifications, budget, and timeline — a signed contract with a licensed builder is often required.
Appraisal
Based on plans and specs, to ensure the completed home will support the loan amount.
Financial documentation
W-2s, tax returns, bank statements, and sometimes proof of additional reserves.
Builder approval
Lenders vet and approve your builder — Keel works with these lenders' processes every day.
Take the Next Step
Talk With Us
Book 15 minutes to answer your home building, financing, or land search questions.
Walk Your Lot
We walk the property with you and flag access, soil, septic, and build constraints.
Plan Your Build
Two ways to get your bearings before you talk to anyone.
Have a question?
What would you like to know about financing your build?