New Construction Loans in Alabama

From the foundation up, we’re by your side!

Ready to kick off your new construction project? BNB Lending offers fast, flexible financing with 1 to 2-year interest-only terms to help you get the job done efficiently. We provide funding for residential properties (1 to 4 units), multi-family units, condos, apartment complexes, commercial buildings, and hotel construction projects. Our financing covers up to 85% of the purchase price and 100% of vertical construction costs, ensuring your project is ready for rent or sale. Plus, with no prepayment penalties, you can refinance or sell whenever you're ready. Our quick closing process means you can get quoted and funded in as little as 14 days.

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How to qualify

To obtain a quote, we will need the following information:

Property Value and

 Purchase Price


Down Payment

Amount


Credit Score

 Asset Types

  • Single Family Homes
  • Townhomes
  • Condos
  • 2 - 4 Units (Duplex, Triplex, Quadplex)
  • Multi-Family: 5 - 8 Units
  • Mixed-Use: 2 - 8 Units
  • Multi-Family: 9+ Unit


Loan Terms

  • Loan Sizes: $100k up to $3.5 Million (Larger loan sizes available on a case by case basis)
  • Purchase LTV: Up to 85%
  • Rate & Term Refinance LTV: Up to 80% 
  • Cash Out Refinance LTV: Up to 80%
  • Amortization: 30 Year % 40 Year Amortization Options Available
  • Term Lengths: 5/6 ARMs, 7/6 ARMs, 10 Year Interest Only, 30 Year Fixed & 40 Year Fixed
  • Floor Rate: 5.50% (subject to change daily due to market volatility)
  • Full Recourse with personal guarantee required for all borrowers with majority ownership (typically 20%+ or 25%+ if closing in an Entity)
  • DSCR Requirement: 1.00x or greater depending on loan size and property type. Sub-1.00x DSCR and NO DSCR options available.
  • Vesting: Lending to Individuals, LLCs, and Corporations. Trusts Allowable on a Case by Case Basis.
  • Average Time to Close: 14 to 35 days

Wondering if you qualify for investment property financing in your area?


We offer lending services in all 50 states!

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Frequently Asked Questions

What are the requirements for getting a construction loan?

To get approved for a construction loan, you’ll need to submit plans, permits, a budget, and a signed agreement with a licensed builder. Most lenders require 15–20% down and a credit score of at least 660. It’s also common to show ownership or a contract on the land. You should have a timeline and exit strategy, especially if the property will be refinanced or sold. These loans are disbursed in draws tied to construction milestones. We consider builder experience, property type, and borrower liquidity when approving each loan. A well-structured proposal helps ensure a faster close and smoother build.

How do home construction loans differ from traditional financing options?

Home construction loans release funds gradually as work progresses, unlike traditional mortgages, which offer a lump sum up front. These loans are structured around build milestones, such as foundation, framing, and final inspection. Payments are usually interest-only during construction, reducing upfront costs. Traditional mortgage lenders underwrite based on income and debt, while construction financing focuses more on the project, builder, and estimated final value. Construction loans give you the flexibility to finance custom projects or investment builds without the delays or documentation of conventional loans. They’re often paired with long-term refinancing upon completion.

What credit score is needed to qualify for new construction financing?

Most new construction loans require a credit score of at least 660, though exceptions exist based on project strength. Lenders look at more than credit—they also consider your liquidity, contractor experience, and the property’s projected value. Lower scores can still qualify if offset by strong assets or a compelling project scope. These loans are designed for real estate investors and builders who may not fit into traditional loan models. That means lighter documentation and a focus on construction feasibility. A better credit profile can unlock higher loan amounts, lower interest rates, and faster approval timelines.

Are construction loans available to small business owners or just individuals?

Construction loans are available to both individuals and business entities. Many investors use LLCs or corporations to manage real estate holdings, and our loan programs are designed to support that. As long as one owner provides a personal guarantee—usually someone with 20% or more ownership—your company can qualify for financing. This makes it easier for business owners to access capital, even if their income isn’t W-2 based. We also lend to trusts on a case-by-case basis. Our loan structure works especially well for full-time real estate investors or businesses developing short-term rentals.

What is the typical loan rate for construction financing?

Construction loan rates generally start around 5.50%, but the final rate depends on factors like credit, experience, and loan size. These loans often use interest-only payments during the build phase, making them easier to manage before the home is stabilized. Riskier deals or borrowers with less experience may see slightly higher rates. After construction, many borrowers refinance into a long-term mortgage or DSCR loan with better terms. We aim to keep rates competitive while prioritizing speed and flexibility. Our approach helps investors minimize holding costs and reduce pressure during the build timeline.

What types of loans are best for new construction projects in Alabama?

The best loans for new construction projects in Alabama are draw-based programs that fund vertical builds in stages. These loans typically cover up to 85% of land purchase and 100% of construction costs. Alabama investors use them for single-family homes, duplexes, multifamily units, or commercial buildings. Our loans offer interest-only terms, no prepayment penalties, and quick closings—usually in 14 to 35 days. Once the build is complete, many borrowers refinance into a DSCR loan or conventional mortgage. This two-step strategy gives you the flexibility to build efficiently while managing long-term debt on your terms.

Explore new construction loans and other STR loans in neighboring states like California and New Mexico to expand your reach beyond Arizona.