New Construction Loans in Iowa
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 building permits, a licensed general contractor, approved plans, and a full construction budget. Most lenders require 15%–20% down and a credit score of 660 or higher. You should either own or have a purchase contract for the land. Loans are released in draws at key project milestones. Lenders also assess your financial reserves, project comps, and builder experience. With proper documentation and a clear exit strategy, approvals can happen quickly. BNB Lending focuses on flexibility, helping you get funded without the red tape of traditional financing.
How do home construction loans differ from traditional financing options?
Home construction loans are short-term, interest-only loans designed for active build projects. Unlike traditional mortgage loans, which are paid out in full at closing, construction financing is released in stages based on build milestones. These loans are ideal for STRs, custom homes, and real estate developments. Interest-only payments keep early costs manageable while the project is in progress. Once construction is complete, borrowers often refinance into a long-term loan. Construction financing also prioritizes the project’s strength and builder history more than borrower income alone. It’s a faster, more agile solution for ground-up builds.
What credit score is needed to qualify for new construction financing?
Construction loans typically require a credit score of 660, but exceptions can be made depending on your project’s strength. We also look at liquidity, builder credentials, and your construction timeline. If you have strong reserves or experience, you may qualify with a slightly lower score. These loans are designed for real estate developers and builders, so they’re not tied to traditional W-2 income or rigid DTI ratios. Instead, underwriting focuses on execution risk and exit plans. The better your preparation—draw schedule, comps, scope—the more likely you'll secure favorable terms and faster funding.
Are construction loans available to small business owners or just individuals?
Yes, construction loans are available to both individuals and small business owners. We regularly work with LLCs, corporations, and real estate investors who manage builds through their businesses. A personal guarantee from someone with 20–25% ownership is typically required. If you're a business owner without standard W-2 income, our flexible underwriting process makes funding accessible. We assess liquidity, builder experience, and market conditions to tailor loans that fit your project. Whether you’re building a duplex, STR, or commercial property, our programs are built for entrepreneurial borrowers. Fast closings and flexible terms make scaling easier.
What is the typical loan rate for construction financing?
Construction loan rates usually start around 5.50%, with the final rate based on credit, experience, and loan size. These loans are interest-only during construction, helping you manage costs while the home is built. After completion, most borrowers refinance into long-term mortgage products. Our rates are customized to your project and adjusted for market conditions, builder track record, and risk level. We also consider your draw schedule and expected timeline when quoting your loan. Whether you're new to construction or scaling up, our lending model ensures competitive pricing aligned with your strategy and goals.
What types of loans are best for new construction projects in Iowa?
The best loans for new construction projects in Iowa are short-term draw-based programs that fund both land and vertical construction. These loans are commonly used for STRs near Lake Okoboji, duplexes in Des Moines, or custom homes across the state. Iowa investors can borrow up to 85% of land costs and 100% of build costs. Once the project is completed, many refinance into a DSCR loan or long-term fixed mortgage. These loans offer interest-only payments, fast closings, and full flexibility to support seasonal timelines or cash-flow-sensitive builds in Iowa’s growing markets.
