Over the last couple of years, TFCU members have been applying for home construction loans at a rapid rate. “During the pandemic, members realized that they really wanted to have their own space,” said Francisco Zepeda, TFCU Mortgage Loan Originator. “For some, that meant building a home on their own land and getting a construction loan. For others, that has meant getting a land loan and a home construction loan.”
Steps to Home Construction Loans
Walking through the construction loan process takes a few steps. “We have to get the house plans, specifications and costs, check builder references, collect the deed to the property, and more,” said Francisco. “We’ve helped many members through lending on home construction loans, so first timers shouldn’t worry. We’ll just take it step by step.”
Trends in Home Building
TFCU members are building larger living spaces, some pools and some home offices with the new work-from-home trend. “Another popular approach is to build ‘barndominium’ – a shop with a living quarters,” said Francisco. “Then they live in the barndominium while the main house is built.”
Loan Money During Construction
After construction loan approval, TFCU works with the member to develop a draw schedule to take money out as construction progress and expenses are incurred. Members are billed interest on the monthly draw down. For most members building a home right now, the TFCU home loans team says they’re noticing it’s taking about a year to complete.
Down Payment and Closing Costs
“In most cases, members need to put 15% down for the construction loan and pay closing costs. TFCU finances the other 85%,” said Mary Bailey, TFCU mortgage loans originator. “However, if a member owns their own land, they may have enough equity that the 15% down payment is not required.”
Getting Started
To get started, simply apply online or schedule a phone or in-person meeting by calling 1-800-456-4828, ext 4448. The TFCU home loan team helps members convert their home dreams into reality.