Arranging construction financing is a more difficult and complex undertaking than obtaining a normal home mortgage. Though fewer lenders offer this type of financing than conventional home mortgages, there are still quite a few in the market.

Construction loans are funded in stages, each one tied to a certain level of completion of the building process. For example, 10% of the loan may be funded after the foundation is satisfactorily inspected, with another 10% paid upon the completion of framing.

A construction loan may be combined with land acquisition financing in order to fund a percentage of the lot purchase price.

Construction loans are generally repaid from the proceeds of a normal mortgage obtained once the home is completed - although some lenders offer combination products that automatically convert into permanent financing.

Interest and fees on a construction loan will be higher than on a normal home mortgage, and many lenders will maintain higher credit standards for applicants.