New Construction Loans in Arizona
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.
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!
Frequently Asked Questions
What are the requirements for getting a construction loan?
To qualify for a construction loan, you’ll need plans, permits, a construction budget, and a licensed builder. Most lenders require 15–20% down and a credit score of 660 or higher. Land must be owned or under contract, and the builder should have a track record of similar projects. Your loan will be structured as a draw schedule tied to construction milestones. Lenders also evaluate liquidity, project comps, and timeline. At BNB Lending, we focus on speed and simplicity—approving strong deals quickly so you can start building. The better prepared you are, the faster the loan closes.
How do home construction loans differ from traditional financing options?
Home construction loans provide phased funding aligned with build progress, unlike traditional mortgages which offer a single lump sum. With a construction loan, funds are disbursed in draws as each project milestone is completed—foundation, framing, inspection, and final delivery. During the construction period, borrowers typically make interest-only payments, which reduces early-stage costs. Traditional mortgages start full amortization immediately and are only available on completed homes. Construction financing is more flexible, focusing on builder credentials, project scope, and projected value instead of personal income or DTI ratios. It’s designed for active development.
What credit score is needed to qualify for new construction financing?
Most construction financing programs require a credit score of 660 or higher. However, we review the full picture, including project quality, borrower liquidity, and contractor experience. If your score is slightly below 660, you may still qualify if you have strong financial reserves and a clear construction timeline. Unlike traditional mortgage loans, these programs are asset-based and designed for builders or investors. Better credit improves your chance of securing higher loan amounts, lower rates, and faster closing. The more prepared you are—with permits, comps, and scope—the easier the loan process will be.
Are construction loans available to small business owners or just individuals?
Yes—construction loans are available to both business entities and individuals. Many borrowers choose to build under an LLC, especially for investment properties or short-term rentals. We lend to corporations and trusts as well, provided there’s a personal guarantor who owns at least 20–25% of the business. This flexibility allows small business owners to access financing even without traditional W-2 income. Whether you're self-employed, scaling a portfolio, or developing a custom home, we work with you to structure a loan that fits your business model and timeline. Our lending criteria are built for real estate professionals.
What is the typical loan rate for construction financing?
Construction loan rates typically start around 5.50%, though actual pricing depends on your credit score, experience, and deal size. Rates are interest-only during the construction phase, which keeps carrying costs low while you build. Higher-risk projects or new investors may see slightly higher rates, but those with strong builder credentials or detailed project plans may qualify for more favorable terms. Unlike traditional mortgages, construction financing is short-term and tailored to your timeline. We review builder history, projected value, and market comps to price your loan competitively while allowing for flexibility and fast access to funds.
What types of loans are best for new construction projects in Arizona?
The best loans for new construction projects in Arizona are staged-draw programs that release funds as building milestones are completed. We offer flexible construction loans that finance up to 85% of land and 100% of vertical build costs. Arizona investors commonly use them for STR builds in Scottsdale, luxury homes in Sedona, or multi-family developments in Phoenix. These interest-only loans are ideal for new builds with a refinance plan in place. After completion, you can roll into a DSCR loan or fixed-rate mortgage. It’s the fastest, most strategic way to build real estate in Arizona markets.
