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Construction Loan needed

We are in need of a construction loan for a new home on our primary residence lot which includes tear down of existing home when completed.  High credit rating, low ddebt, high income.....lacking lenders available :(
West Chester, pa
  • February 06 2010 - Lancaster
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Answers (7)

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  • June 13
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Brian,

If I was charging what they charged for 203K loans I would want that business as well.  They are very good at K loans but they charge a premium for them.

Since the tear down will take place after the construction it would be very tough to use part of the existing foundation....for the new home...
  • February 12 2010
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I hope you were able to obtain some good information from the earlier responses.  I wanted to add that if the new construction incorparates part of the exisiting foundation I would recommend checking out M&T Bank as well.  That's my bank of choice when I originate and close FHA 203k loans because they want that line of business.  Many banks/lenders say they offer the progam but most really don't seem to want to be in that segment of lending. 

  • February 12 2010
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Construction loans are a different bread of their own, but Andrew does know his stuff.  Good Luck
  • February 06 2010
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American Home Bank in PA has a great Construction loan program.  It is a Division of the First National Bank of Chester County.  One of the best construction programs I have come accross.

They offer 5% down and FHA New Construction loans.  Something worth looking into.
  • February 06 2010
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In the current climate we are in, you will either need to have a huge amount of equity in the lot whereby by a 50% loan to value would suffice to build your home-  i.e.-  Say the lot is worth $100,000 and assume you owe $25K-  A local bank may lend you another $25K so the total exposure is now 50%-  In my scenario $25K would be available to build the home-   (not remotely doable but I just used these figures for an example-) These numbers are approximates as some local banks my go to 65% LTV.

The other alternative would be a full FHA 203k loan-  When shopping, stay away from the 203K streamline.
  • February 06 2010
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That may be a little hard to do these days. How much do you owe on the existing house? Little, or nothing, I hope.
  • February 06 2010
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