So you want to build your own house? Not a single large bank and no online banks that I contacted (and I contacted lots)  offer construction financing. I called almost every bank that I tried to refinance my existing mortgage with and none of them offered construction loans. I called up Wells Fargo, Bank of America and larger local banks and none of those offered construction financing either. The only larger banks that did offer construction financing, like SunTrust, wanted a 25% down payment.

Then I started calling all the smaller local banks and mortgage companies and found that almost everybody wanted at least 20% down except these three:

1. Fulton Bank (80/10/10 conventional without PMI, One time Close 5/1 ARM convertible to 30 yr fixed, Interest only during construction)

2. Union Mortgage (10% down conventional mortgage with PMI, Prime + 0.25, minimum 6% during construction, refinance to 30yr fixed when complete)

3. Stellar One (3.5% down FHA with PMI or 80/10/10 conventional without PMI, Construction-Perm, Prime -? 0.25 currently 3.75% interest only during construction, refinance to 30 yr fixed when complete)

The UVA Credit Union was another one that does offer construction financing on a case by case basis but their criteria are very strict and I have no idea what their loan terms are.

We started out with Stellar One but after the loan officer we were working with left the company, everything was downhill. Our loan was transferred to the Harrisonburg office and after that nobody had any idea what was going on. No one was able to answer any questions or give me any timelines, even approximate, because of the multiple approval processes that needed to take place and some were outsourced. Nobody would even bother to contact any underwriters to speed things up until we literally called the director of Mortgages. From the end of October as an approximate closing period we went all the way to the end of December and at every point we were frustrated. Incorrect paperwork, general lack of caring about accuracy or customer satisfaction and persistent denial of responsibility for mistakes eventually made us really fed up and switch to somebody else.

We tried Union Mortgage next and I felt a world of difference, paperwork was more professionally done. There was a proper checklist of all required documentation and they knew exactly what happens and the process was fairly simple. However they wouldn’t approve our builder who is a relatively new small builder in Harrisonburg.

At this point after almost giving up on building a house, we were recommended Fulton Bank and not only was their loan the best offering of the three they were excellent to work with. The process was smooth and they worked with us and the builder to get everything approved quickly. I would highly recommend them. Contact Cleve Brannock – (434) 975-2319

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