Many people in the market for a new home are aware of common financing options like FHA or VA loans, but if you’re specifically looking at new construction homes, there are a few more loan types you might consider. When considering financing options for new construction homes in Denver, here are a handful of routes you can explore:

Construction-to-Permanent Loan (C2P)

·      This type of loan covers both the construction phase and the mortgage once the home is completed.

·      During construction, you typically make interest-only payments on the amount disbursed for building.

·      Once construction is complete, the loan converts to a traditional mortgage.

Traditional Mortgage

·      If you have sufficient funds or can secure a mortgage independently, you can opt for a traditional mortgage to finance the purchase of a new construction home.

·      These mortgages may require a larger down payment compared to existing homes.

Builder Financing

·      Some builders offer financing options directly to buyers.

·      These can sometimes include incentives such as lower interest rates or reduced closing costs, but it's essential to compare them with other options.

Government Loans

·      FHA (Federal Housing Administration) loans and VA (Veterans Affairs) loans can sometimes be used for new construction homes.

·      These loans often have lower down payment requirements, making them accessible to more buyers.

Private Financing and Home Equity Loans

·      If you already own property or have significant equity in another home, you may consider using a home equity loan or line of credit (HELOC) to finance the new construction.

·      Private lenders or credit unions may also offer financing options tailored to new construction.

Bridge Loans

·      If you need temporary financing to cover the gap between buying a new construction home and selling your current one, a bridge loan might be an option.

·      Bridge loans are short-term loans that can provide funds until your current home sells and you can secure permanent financing.

Before deciding on a financing option, we recommend comparing rates, terms, down payment requirements, and closing costs. It’s also never a bad idea to talk with a mortgage advisor or financial planner who can help you navigate the complexities of financing a new construction home in Denver. After you’ve determined the best financing option for you, give Metrowest a shout and we can explore all of Denver’s new home construction options!