Construction loans for homes in Texas are short-term financial products specifically designed to fund the construction of a new home from the ground up. Unlike a traditional mortgage loan, a construction loan releases funds in stages as your build progresses — with your lender authorizing each draw after reviewing completed work. Whether you’re exploring loan programms of Champions mortgage Houston for the first time or ready to break ground on a new home construction project, Champions Mortgage has the loan options, lending experience, and local knowledge to help you build with total confidence.
A construction loan is a specialized home loan in Katy, TX that provides the funds needed to cover your project budget through each phase of the build. Rather than receiving a lump sum upfront, the loan releases funds in stages — called draws — as each stage of construction is completed. Your lender will assess the progress before authorizing each draw, making sure the work stays on track and within the agreed project budget.
These loans are typically short-term in nature, covering the construction phase until your new home is ready for occupancy. During this time, the borrower typically makes interest-only payments on the funds that have been drawn — which helps keep monthly costs manageable while you focus on the construction of your new home.
Construction loans help you build a home when you can’t find existing inventory that meets your needs. Whether you’re ready to build on land you already own or need to finance a lot purchase plus construction, Champions has loan options to help you finance your custom new home in Texas.
Qualified borrowers can finance 100% of land and construction costs with approved credit. Build a home without tying up cash in down payments. Save your money for upgrades and furnishings. *Loans are subject to credit approval and restrictions may apply. Ask your loan officer about qualification requirements.
Construction loans structured properly don’t require mortgage insurance premiums. Keep more money in your budget for your construction project. The lender evaluates loan to value based on the completed appraised value, not just land cost.
Construction financing through Champions offers competitive rates compared to traditional construction loans. Lock your permanent mortgage rate during the construction phase so you know your final payment before the home is completed. Fixed-rate mortgage options available.
Construction loan programs work with credit scores from 620+. Recent credit issues? We evaluate the full picture. Strong income and acceptable debt ratios can offset lower scores. Subject to credit approval and lender requirements.
Pay interest-only payments during construction. Your loan officer sets up a draw schedule based on construction milestones. Each inspection triggers the next draw. Full principal and interest payments start when construction is completed and you move in.
Building a home is a big decision, and the construction process takes careful planning. Here’s how it works: you buy the land (or use land you own), hire a builder, secure construction financing, and the lender releases funds in stages called draws as construction progresses. The typical build takes 6-8 months from breaking ground to move-in.
Champions streamlines this with one-time close construction loans that become your permanent financing upon completion.
Before you contact us, know roughly what you want to spend and how much time you have. Construction costs in Texas run $150-$300+ per square foot depending on location, finishes, and builder. A 2,500 square foot home costs $375,000-$750,000+ to build. Add land costs—anywhere from $50,000 for rural acreage to $200,000+ for prime suburban lots. Your builder provides detailed cost estimates. The lender orders an appraisal based on plans and specifications. This “subject-to-completion” appraisal determines how much you can borrow. Construction takes 6-12 months typically. Weather, materials availability, and permitting affect timelines. Plan realistically.
The bank’s lending team works with you and your builder throughout. Inspections happen at key milestones. The construction phase ends when you receive your certificate of occupancy. Your one-time close loan converts to your permanent mortgage and you make your first full payment.
Construction loans require stronger qualification than traditional mortgage loans because the lender takes more risk. Here’s what you need:
Credit Score Requirements: Minimum 620-640 for most construction loan programs. Some lenders require 680+ for one-time close construction loans. Higher scores get better loan rates and terms.
Down Payment: Expect 10-20% down on total project cost (land plus construction). Some programs offer lower down payments with excellent credit. Zero down options exist for qualified borrowers but require strong income and credit approval.
Income Verification: You’ll provide 2 years of tax returns, recent pay stubs, and bank statements. Self-employed borrowers need business tax returns. Lenders verify you can afford construction payments plus your current housing costs during the build.
Debt-to-Income Ratio: Most lenders cap DTI at 43-45%. They calculate your payment based on the completed home’s permanent mortgage, not just construction interest. Lower DTI improves approval odds.
Construction Plans: Complete architectural plans and specifications required. The lender and appraiser need detailed drawings showing square footage, materials, and finishes. Generic plans work if customized for your lot.
Champions offers multiple construction loan programs. Choose the option that fits your situation.
The most popular construction financing option. in Houston You close once, lock your interest rate, and the loan automatically converts to permanent financing when construction is completed. No second closing costs or requalification.
Similar to one-time close but structured with more flexibility. During construction, you pay interest only on funds drawn. Upon completion, the loan converts to a traditional mortgage with principal and interest payments. Your permanent financing terms are set when you close.
Finance your land purchase first, then add construction financing later. This two-loan structure works when you’re not ready to build immediately. Buy the lot now, start construction when you’re ready. The lot loan converts or gets paid off when construction financing closes.
Short-term construction loan (12-18 months) that covers only the building phase. When construction is completed, you refinance into permanent financing. This means two closings and two sets of closing costs.
FHA offers construction-to-permanent loans with down payments as low as 3.5%. These help first-time builders access home construction loans with less cash required. Builder must meet FHA requirements.
Finance both land purchase and construction simultaneously. The lender evaluates total project cost and provides one loan covering both. You pay interest only on the land portion until construction draws begin.
We make the construction loan application and lending process as simple as possible:
Contact Champions to discuss your construction project. We’ll review your credit, income, and down payment to determine how much you can borrow. Pre-qualification takes 1-2 days. You’ll know your budget before you shop for land or finalize builder contracts.
Complete the full loan application once you have construction plans and a builder contract. Provide tax returns, pay stubs, bank statements, and construction specifications. Your loan officer submits everything to underwriting.
While your loan processes, work with your builder to finalize every detail. The appraiser needs complete specifications to estimate value. Changes later can delay funding. Get everything in writing.
After underwriting approves your construction loan and the appraisal confirms value, you’re ready to close. Sign documents, pay closing costs and down payment, and receive your construction financing. The lender sets up your draw schedule and inspection process.
Champions Lending LLC dba Champions Mortgage
Your Trusted Mortgage Partner for Home Loans.
