This is the second post in a two-part blog series on how to build custom homes in Northern Virginia - Read Part 1 here.
Build Custom Homes in Northern Virginia – More Options
Another way to go about this is to use one of the many big custom home building companies (i.e. Stanley Martin, Carrington, etc.). In many cases, these types of companies have a range of designs you can choose from, and you pick one of their homes and they build it. This is more of a “one stop shop” choice.
Which Loan Options do You Have When You Build Custom Homes?
With regard to the construction loan, most people do what is called a “construction to permanent” loan. This involves getting a loan that includes both the purchase of the land and the new construction. Most big lenders do this type of loan. The key here is that the lender has to approve the construction plans and verify that the builder is licensed, etc. Also, the construction has to begin immediately after the land is purchased.
What if You Want to Buy and Hold Vacant Land for a While Before You Build?
If you bought a vacant lot and held it for a while without building on it, you most likely wouldn’t be eligible for a loan through a bigger lender. This is because many lenders view vacant land as too much of a liability. If you wanted to finance the purchase of a vacant lot and hold it for a while, your best bet would be to approach a smaller lender who is local to that piece of land. They would be more likely to finance that type of purchase, although they would most likely require a large down payment, and the loan would be a short term loan that requires a balloon payment of the balance of the loan in 5-7 years.
I hope you’ve enjoyed this blog post on how to build custom homes in Northern Virginia. If you’d like to compare homes that are currently on the market, including new construction, to what’s available in the custom building arena, use my website’s free home search tool.