New Construction Loans in North Dakota

Frequently Asked Questions

What are the requirements for getting a construction loan?

Construction loans require detailed architectural plans, permits, a licensed builder, and a complete construction budget. You’ll need to either own the land or be under contract. Most lenders require at least 15% down and a credit score of 660 or higher. At BNB Lending, we release funds in draws based on project milestones. We also evaluate builder experience, exit strategy, comps, and liquidity. If you have a clear plan and solid documents, we can move quickly to approve and fund your deal. Our process is built for speed and transparency.

How do home construction loans differ from traditional financing options?

Home construction loans are designed to fund your build in stages, with interest-only payments during the construction phase. In contrast, traditional loans fund in full at closing and begin amortization right away. Construction loans are underwritten based on your project’s viability, builder qualifications, and draw schedule—not just income or credit. Once the home is completed, most borrowers refinance into a long-term mortgage or DSCR loan. This structure supports flexibility and better cash flow during the build, especially for STR or multifamily investments.

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

A credit score of 660 is typically required, but we assess more than your FICO. Builder experience, reserves, exit plan, and project scope also matter. If your score is slightly below the threshold but your project is solid and the paperwork is organized, we may still be able to fund it. Our underwriting looks at real-world execution—not just a credit profile. Many of our clients are builders, investors, or STR hosts who don’t fit traditional lending molds, and we’re structured to serve them.

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

Yes—construction loans are available to small business owners, LLCs, and corporations, not just individuals. A personal guarantor with 20–25% ownership is typically required. We focus on the strength of the builder, the scope of the project, and your timeline—not just on income verification. Whether you're building one STR or scaling a portfolio, we provide phased financing with minimal red tape. Our business-friendly terms are designed to help you build fast, maintain control, and hit your ROI goals—without waiting on bank bureaucracy.

What is the typical loan rate for construction financing?

Construction loan rates typically start at 5.50%, depending on factors like credit score, builder experience, and project complexity. These loans are interest-only during construction, making them cost-effective while your home is under development. Once construction is complete, most borrowers refinance into long-term mortgages. Your rate is influenced by your draw schedule, liquidity, and documentation. If your plan is complete and the project is well-scoped, we can often close faster and offer better pricing. Our goal is always speed, flexibility, and clean execution.

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

The best loans for new construction projects in North Dakota are interest-only draw loans that disburse funds as your build progresses. Whether you're constructing an STR in Bismarck, a duplex in Fargo, or a multifamily build in Grand Forks, these loans provide up to 85% of land value and 100% of vertical construction costs. Once completed, borrowers usually refinance into DSCR or long-term mortgages. Our North Dakota programs support fast-moving investors with simple underwriting, quick closings, and terms designed to match your build schedule—not delay it.

Explore new construction loans and other STR loans in neighboring states like Minnesota , South Dakota , and Montana to pursue more investments beyond North.