--- title: Construction description: Get clear answers to common conventional loan questions. Learn about requirements, credit score, down payment, PMI, and closing costs. --- [Skip to content](https://www.nelsongroupmovesu.com/construction#main-content) Nelson Group Powered by Edge Home Finance - [Home](https://www.nelsongroupmovesu.com) - [Loan Options](https://www.nelsongroupmovesu.com/programs) - [Today's Rates](https://www.mortgagenewsdaily.com/mortgage-rates/mba) - [Free Tools](https://www.mortgagecalculator.org/free-tools/) - [About Us](https://www.nelsongroupmovesu.com/about-us) Show submenu for About Us - [Corporate Home](https://www.nelsongroupmovesu.com/www.edgehomefinance.com/Kenny-Nelson) Open main navigation Close main navigation - [Home](https://www.nelsongroupmovesu.com) - [Loan Options](https://www.nelsongroupmovesu.com/programs) - [Today's Rates](https://www.mortgagenewsdaily.com/mortgage-rates/mba) - [Free Tools](https://www.mortgagecalculator.org/free-tools/) - [About Us](https://www.nelsongroupmovesu.com/about-us) Show submenu for About Us - [Corporate Home](https://www.nelsongroupmovesu.com/www.edgehomefinance.com/Kenny-Nelson) - [Contact us](https://www.nelsongroupmovesu.com/contact-us) [Contact us](https://www.nelsongroupmovesu.com/contact-us?hsLang=en) #  Construction and Renovation loans Construction and renovation loans are designed for buyers and homeowners who want to build new or transform an existing property. With a construction loan, you can finance the purchase of land and the cost to build your home, with funds released in stages to your builder as construction progresses. Once the project is complete, the loan transitions into a traditional mortgage. Renovation loans offer a similar convenience for existing homes or fixer-uppers. Whether you’re purchasing a property or refinancing your current home, you can roll the cost of repairs and improvements into one mortgage. There’s no need for a second loan or additional monthly payment—just one streamlined solution to upgrade your home, increase its value, and bring your vision to life.       Nee more Info FAQ's Below ![Arrow on the road](https://www.nelsongroupmovesu.com/hs-fs/hubfs/Arrow%20on%20the%20road.jpeg?width=354&height=245&name=Arrow%20on%20the%20road.jpeg)   Why choose Renovation loans **Why Choose a Renovation Loan?** Renovation home loans offer a smart, flexible way to upgrade your home without the hassle of multiple loans. Key benefits include: - **One loan, one monthly payment** — Combine your purchase or refinance with renovation costs into a single mortgage. - **Faster access to funds** — Begin renovation work shortly after closing, without delays. - **Flexible financing options** — Choose from a variety of loan programs designed to fit projects of all sizes and scopes.   Types of Renovation loans **Jumbo Renovation Loan** Ideal for high-value homes, this loan finances large-scale renovations above conforming limits—perfect for luxury upgrades or major remodels. **FHA 203(k) Renovation Loan** Combines purchase or refinance with renovation costs. - **Standard:** For structural and major repairs - **Limited:** For smaller or cosmetic updates (up to 75K) **USDA Renovation Loan** Designed for eligible rural properties, this option bundles purchase and repair costs into one affordable USDA-backed mortgage. **VA Renovation Loan** Available to eligible Veterans and service members, this loan combines VA benefits with renovation financing in one monthly payment. **HomeStyle® Renovation℠** Flexible financing for a wide range of interior and exterior improvements, from cosmetic updates to structural changes. ### Pool Escrow Looking to add a pool? This financing option rolls the cost of pool construction into your home purchase or refinance. It’s available with both conventional and jumbo loans.   How do construction loans work? A construction loan allows homebuyers to finance the purchase of land and the cost to build a new home. Funds are released in scheduled draws to the builder as construction progresses, rather than all at once. Once the home is complete, the loan transitions into a traditional mortgage. Types of Construction loans - **Conventional Construction Loans** - Down payment: **5%–20%** (based on occupancy and loan type) - **FHA Construction Loans** - Down payment: 3.5% - **USDA Construction Loans** - 0% down payment - **VA Construction Loans** - 0% down payment for eligible Veterans and service members General Guidelines ## **Conventional Construction Loans** **Typical Guidelines** - Minimum credit score: **680–700+** (program dependent) - Down payment: **5%–20%** (based on occupancy and loan type) - Primary, second home, and investment options available - Flexible renovation and custom build options - Higher reserves often required - Best for strong credit and income profiles --- ## **FHA Construction Loans** **Typical Guidelines** - Minimum credit score: **580** (3.5% down) - Down payment: **3.5%** - Primary residence only - More flexible credit and debt ratios - FHA-approved builder required - Includes FHA construction-to-perm and FHA 203(k) renovation options --- ## **VA Construction Loans** **Typical Guidelines** - **0% down payment** for eligible Veterans and service members - Primary residence only - No monthly mortgage insurance - Flexible credit and income guidelines - VA-approved builder required - One-time close option available in many cases --- ## **USDA Construction Loans** **Typical Guidelines** - **0% down payment** - Property must be in an eligible rural area - Household income limits apply - Primary residence only - USDA-approved builder required - One-time close construction financing available --- ### **Good to Know** - Builder approval is required on **all construction loans** - Draw schedules are tied to construction milestones - Appraisals are based on **future (completed) value** # Nelson Group Powered by Edge Home Finance             Mortgage financing should feel like a relationship, not a transaction!   Kenny Nelson NMLS #856822   Nelson Group Powered by Edge Home Finance Company NMLS: 891464 5868 Baker Rd Minnetonka, MN 55345   [https://edgehomefinance.com/privacy-policy/](https://edgehomefinance.com/privacy-policy/) [https://edgehomefinance.com/licensing-disclaimer/](https://edgehomefinance.com/licensing-disclaimer/) [www.nmlsconsumeraccess.org](https://www.airbornemortgagegroup.com/www.nmlsconsumeraccess.org) Contact Us - Phone 251.591.7003 [Kenny.Nelson@Edgehomefinance.com](mailto:ken.harter@airbornemortgagegroup.com) Kenny Nelson NMLS: 856822  AL /FL [facebook-f icon](https://www.facebook.com/Knelson316) [linkedin-in icon](https://www.linkedin.com/in/kenneth-nelson-30b08b76/) [twitter icon](https://x.com/knelson79) [instagram icon](https://www.instagram.com/Kennynelson50/#) [Follow us on Facebook](https://www.youtube.com/@NelsonGroupedge) .footer-container, .footer-wrapper, .footer-row { max-width: 100% !important; width: 100% !important; margin-left: 0 !important; margin-right: 0 !important; }