New Construction Loans in Alaska

Frequently Asked Questions

What are the requirements for getting a construction loan?

To qualify for a construction loan, borrowers usually need a detailed scope of work, architectural plans, a licensed contractor, and an itemized budget. Most programs also require you to own the land or have it under contract. A down payment of 15–20% is common, and credit score minimums typically start at 660. You’ll need to show financial liquidity and an exit strategy, like refinancing or sale. Lenders may also request permit documentation and timelines. Our loans are disbursed in phases tied to build milestones. Strong deals with experienced builders tend to close faster and receive better rates.

How do home construction loans differ from traditional financing options?

Home construction loans differ from traditional mortgage options by offering staged funding and interest-only payments during the build phase. With a construction loan, funds are released in draws based on progress milestones—such as foundation, framing, or final inspection. You only pay interest on what’s been drawn, helping control costs. Traditional loans offer a lump sum and require full amortization right away, even if the property isn't finished. Construction financing is more flexible and built for ground-up development. Lenders focus more on the project plan, builder credentials, and final value instead of personal income alone.

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

A credit score of 660 is typically needed to qualify for new construction financing, although we review each application holistically. If you have a strong builder team, permits in place, and solid financial reserves, we may approve deals with lower credit scores. These loans are based on the asset and the project timeline, so documentation is lighter than with a traditional mortgage. Higher scores can qualify for better interest rates and lower down payments. Your liquidity, project comps, and experience will also affect approval terms. We want to see a clear path to completing and monetizing the project.

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

Construction loans are widely available to small business owners, not just individuals. At BNB Lending, we fund projects held under LLCs, corporations, and even trusts in some cases. As long as a qualifying individual provides a personal guarantee—typically a 20–25% owner—we can structure the loan under your business. This is especially helpful for full-time investors, developers, or builders who don’t rely on traditional W-2 income. We focus on the merits of the deal, the team executing it, and your plan for sale or refinance. Our flexible underwriting makes it easier for business owners to access capital.

What is the typical loan rate for construction financing?

Typical construction loan rates start around 5.50%, with adjustments based on risk, credit profile, and loan size. These loans are usually interest-only during construction, which helps preserve working capital. Once construction is complete, many borrowers refinance into a long-term mortgage or DSCR loan with fixed terms. Higher-risk projects, less experienced borrowers, or unusual asset types may result in slightly higher rates. Because the loan is short-term and tied to draw schedules, lenders focus on exit strategy and timeline when setting pricing. We tailor each offer based on your goals, builder history, and market comps.

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

The best loans for new construction projects in Alaska are draw-based programs that release funds based on build milestones. These construction loans are ideal for short-term rental builds, vacation homes, or multi-unit properties in markets like Anchorage, Juneau, or Fairbanks. We finance up to 85% of the land cost and 100% of vertical construction costs. Alaska borrowers often pair these loans with a refinance strategy once construction is complete. Our loans offer quick closings, no prepayment penalties, and interest-only payments during the build. The flexibility allows investors to build confidently in remote or seasonal markets.

Explore new construction loans and other short-term rental loans in neighboring states like Missouri and Mississippi to pursue new opportunities beyond Arkansas.