New Construction Loans in California

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?


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Frequently Asked Questions

What are the requirements for getting a construction loan?

To qualify for a construction loan, you’ll need detailed plans, permits, a builder contract, and a line-item budget. Most lenders require a 15% to 20% down payment and a credit score of at least 660. You'll also need to own the land or have it under contract. The loan is disbursed in phases based on progress milestones. Strong applications include builder resumes, projected rental income (if applicable), and comps. At BNB Lending, we aim to close quickly once your documentation is complete. Borrowers with prior project experience tend to qualify faster and access better rates.

How do home construction loans differ from traditional financing options?

Home construction loans differ significantly from traditional mortgage financing. These loans are structured to release funds in draws as work progresses—like foundation, framing, and roofing. During construction, you’ll typically make interest-only payments, keeping costs lower until the home is stabilized. Traditional mortgages provide a lump sum and start amortizing immediately, which doesn’t work well for unfinished projects. Construction loans are evaluated more on the project’s budget, permits, and builder team than your personal income. This structure allows you to manage capital effectively while scaling your real estate portfolio or custom home development.

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

A 660 credit score is generally the minimum for new construction financing, although exceptions exist. We also evaluate the strength of the project, liquidity, and team experience. If you have a strong builder and approved permits, slightly lower scores may still be considered. These loans focus more on project execution than traditional income verification. Higher credit scores often qualify for better interest rates, reduced reserves, and faster funding timelines. Be prepared to show comps, detailed timelines, and proof of liquidity to support the loan. A complete and professional package improves your approval odds significantly.

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

Construction loans are available to small business owners as well as individuals. We frequently lend to LLCs and corporations involved in real estate development. As long as one party with 20%–25% ownership provides a personal guarantee, the business can qualify for funding. This allows self-employed investors to access capital without W-2s or traditional income documentation. Whether you’re building an STR, a multifamily property, or a custom home, we can structure the loan around your business model. Documentation requirements focus on the project, builder, and exit plan—not just personal financials. Flexibility is built into the approval process.

What is the typical loan rate for construction financing?

Construction loan rates typically start around 5.50%, with adjustments based on borrower credit, loan size, and project type. These rates apply during the interest-only build phase. Since these loans are short-term, the rate reflects project risk and expected timelines. Borrowers with strong credit, liquidity, and experience may access lower rates. After completion, you can refinance into a DSCR mortgage or a 30-year fixed loan. This two-step structure allows for lower upfront payments and long-term financing later. We tailor rates to your needs while keeping the approval and draw process streamlined and efficient.

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

The best loans for new construction projects in California are staged-draw programs that release funds as you hit build milestones. These construction loans are ideal for STRs in Joshua Tree, luxury builds in Los Angeles, or multifamily units in San Diego. We fund up to 85% of land acquisition and 100% of vertical construction. California borrowers often use these loans before refinancing into long-term mortgage products. Our programs offer interest-only payments, no prepayment penalties, and flexible terms based on project scope. This model supports builders and investors working in fast-moving, high-cost markets.

Explore new construction loans and other short-term rental loans in neighboring states like New York and Massachusetts to build your presence beyond Connecticut.