New Construction Loans in Minnesota
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?
Construction loans require a licensed builder, approved permits, architectural plans, and a detailed budget. Land must be owned or under contract. Most lenders require at least 15% down and a minimum credit score of 660. We disburse funds in stages based on build progress. We also review liquidity, builder track record, and exit strategy. BNB Lending structures loans to align with your timeline and milestones, making it easier for real estate investors and builders to move quickly. If your documentation is organized, we can get you funded faster than traditional lenders.
How do home construction loans differ from traditional financing options?
Home construction loans are short-term, phased loans that fund building stages as you progress—unlike traditional mortgage loans that fund in full at closing. These loans require interest-only payments during construction, which helps preserve cash flow. Once the project is completed, you can refinance into a long-term loan like a fixed mortgage or DSCR product. Construction financing focuses on build quality, permits, and scope instead of your personal W-2 income. It’s a strong choice for STR investors, developers, and builders who want control over timelines and capital release.
What credit score is needed to qualify for new construction financing?
New construction loans generally require a credit score of 660 or higher. However, other elements like a solid builder, detailed plans, and strong liquidity can offset a slightly lower score. We focus on the full deal—not just credit. We’ll evaluate your budget, exit plan, and comps to assess viability. Higher credit scores usually mean better loan rates and faster closings. Still, investors with mid-range credit can qualify with the right project. At BNB Lending, we work with builders and developers at every stage to make new construction accessible.
Are construction loans available to small business owners or just individuals?
Yes, construction loans are available to business owners as well as individuals. Many investors choose to borrow through LLCs or corporations to protect assets and optimize taxes. We require a personal guarantor with 20–25% ownership. Income documentation is minimal—we focus on liquidity, builder history, and project strength. Our loans are ideal for STR developers, flippers, and real estate professionals who don’t have W-2 income. We fund projects across residential and commercial categories and structure loans to fit business needs and exit timelines, not bank red tape.
What is the typical loan rate for construction financing?
Construction loan rates typically start around 5.50% and are interest-only during the build phase. Your rate depends on your credit score, experience, project size, and exit plan. After the build is finished, many borrowers refinance into a DSCR or fixed mortgage. We tailor pricing to reflect builder quality, timeline, and draw structure. Our goal is to offer fast, flexible funding with minimal documentation and predictable loan costs. If you're well-prepared, you’ll likely secure favorable rates and terms—especially if your project is clear, realistic, and properly documented.
What types of loans are best for new construction projects in Minnesota?
The best loans for new construction projects in Minnesota are draw-based, short-term loans that disburse funds as each stage is completed. These loans work well for STRs in the Twin Cities, lake homes in Brainerd, or duplexes in Rochester. We finance up to 85% of land and 100% of vertical construction. Once construction is complete, borrowers often refinance into long-term mortgage products. Minnesota investors benefit from our fast approvals, flexible structures, and interest-only terms that align with real building timelines. We support builders who need capital that works as efficiently as they do.
Explore new construction loans and other short-term rental loans in neighboring states like Kansas and Illinois to expand beyond Missouri.
