Resources
Sacramento Construction Loan FAQ
Twelve of the most common questions we hear from builders, developers, and investors across Sacramento, Roseville, Elk Grove, Folsom, Rocklin, Stockton, and the broader Northern California market.
What areas do you serve?+
We place construction loans throughout Sacramento, Roseville, Elk Grove, Folsom, Rocklin, Stockton, and the broader Northern California and Bay Area markets — including infill lots, suburban projects, and rural acreage builds.
What loan sizes do you typically place?+
Most of our transactions fall between $500,000 and $5,000,000+. We have lender relationships that cover both the smaller end (single SFR spec builds) and larger multifamily and small-commercial construction.
What's a realistic interest rate for a Sacramento construction loan today?+
Pricing is highly dependent on loan size, leverage (LTC/LTV), borrower experience, and credit. Rates for the deals we place typically start in the 9% range, with terms up to 24 months. Final pricing comes from the lender after package review.
Do I need to be a licensed contractor to borrow?+
No. Most of our borrowers are developers, investors, or owner-builders who hire a licensed, insured general contractor. The GC's qualifications are reviewed by the lender alongside the borrower.
Can I use a construction loan for an ADU or home addition in Sacramento?+
Yes — many lenders fund ADU construction and large additions, particularly for investment use. Owner-occupied consumer scenarios fall outside our business-purpose focus.
How long does it take to close?+
Typically about 30 days from a complete application. See our full breakdown of the construction loan closing timeline.
What credit score do I need?+
Most programs start around 680, though compensating factors like strong liquidity or experience can expand options. See our credit score guide for details.
Are there construction loans for first-time developers?+
Yes. We have dedicated lender programs for first-time developers with liquidity, an experienced GC, and a viable project. See our first-time developer page.
Do you finance multifamily and townhome projects?+
Yes — small to mid-sized multifamily, townhome, and mixed-use construction is a core part of what we place across Sacramento and Northern California.
Are these loans for owner-occupied homes?+
No. Our financing is business-purpose only — investment properties, spec builds, and development. Owner-occupied consumer construction is outside our scope.
What financing do investors use after construction is complete?+
It depends on the exit. Builders selling the finished property typically pay off the construction loan at sale. Investors who keep the property as a long-term rental usually refinance the construction loan into a DSCR loan once the property is leased and producing income — DSCR financing qualifies on the property's rental cash flow rather than the borrower's personal income, which is why it's a common takeout for stabilized rentals.
What documentation should I prepare?+
At minimum: a detailed construction budget, architectural/engineering plans, permit status, GC information, entity documentation, and proof of liquidity. See our requirements checklist for the full list.
What's the difference between LTC and LTV?+
LTC measures the loan against total project cost; LTV measures it against the appraised completion value. Lenders size to the lesser of the two. See our LTC vs LTV guide.
Want a deeper dive? See our guides on construction loan basics, LTC vs LTV, draw schedules, closing timelines, credit requirements, and down payment requirements.
Planning to hold the completed property as a long-term rental? Investor takeout financing — including DSCR rental loans and DSCR refinancing options — is covered in detail at DSCRLoansOnline.com.
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