A construction loan funds your build in stages and either converts into a permanent mortgage at completion (one-time-close) or is replaced by a separate permanent loan (two-time-close). One-time-close is usually the lower-cost, lower-risk path.
Overview
Construction financing is a different animal than buying an existing home. The lender funds the build progressively — in draws tied to inspections — and the loan structure has to plan for both the construction period and the long-term mortgage that follows.
Utah's strong new-construction market (St. George, Washington County, Eagle Mountain, Saratoga Springs, Heber Valley, Cache Valley, the Wasatch Back) means construction loans are a core financing tool here. Choosing the right structure up front saves significant cost and stress.
Who it's for
- Buyers building a custom home on a Utah lot they own or are purchasing
- Move-up buyers building in master-planned communities (Daybreak, Suncrest, Promontory)
- St. George / Washington County buyers in custom-home subdivisions
- Cache Valley, Heber Valley, and Wasatch Back custom builds
- Buyers using an FHA, VA, or USDA construction option where available
Key benefits
- One closing covers construction + permanent financing (OTC)
- Lock the permanent rate up front, before construction starts
- Interest-only payments on disbursed balance during the build
- Builder is paid in inspected, verified stages — protecting you
- Available with conventional, jumbo, VA, and (with select lenders) FHA / USDA structures
Common requirements
- Typical 20% down on conventional construction loans (less for VA/USDA/FHA)
- Credit score generally 680+; 700+ for best pricing; higher for jumbo construction
- Detailed construction contract, plans, specifications, and budget
- Licensed Utah general contractor (most lenders) or qualifying owner-builder approval
- Builder approval — lender vets the contractor's financial and project history
- Realistic build timeline (typically 6–12 months) with contingency
Utah-specific considerations
- Utah's permitting timelines vary widely by city — Eagle Mountain and Saratoga Springs move faster than Park City or Salt Lake. Build permit time into the construction period.
- Lot loans (for buying land before you build) are common in Utah and can roll into a construction loan; coordinating the lot purchase and construction financing up front avoids double closings.
- Custom builds in Summit and Wasatch Counties often require jumbo construction financing — fewer Utah lenders offer this, so lock in the lender before committing to a builder.
- Utah winter construction is normal but slows draws on exterior work; plan the schedule with the builder and lender in mind.
Frequently Asked Questions
Next steps
Ready to move forward? Start your application, run scenarios in the mortgage calculator, or schedule a call with Tres Miller — 31+ years of Utah lending, NMLS #217768.
Related Resources
When the build exceeds conforming limits.
Permanent-side conventional financing.
VA construction option for veterans.
USDA new-construction option in eligible areas.
Begin construction loan pre-approval.
Plan the right construction structure.