5 Best Construction Loans in Colorado


Construction loans in Colorado are available in a many different options depending on your goals and needs.

There is no question that Colorado is a beautiful state, but with the high prices of houses, it’s becoming increasingly difficult for people to find a home to call their own. The average listing price for a home in Colorado is $415,000 and the median sale price is $600,000 according to the Denver Post. These prices are significantly higher than the national averages. Working with home builders or contractors, you can get your dream home in place sooner than you think. Since home construction loans are short term rather than a permanent mortgage, homebuyers can stop looking for the perfect property on Zillow or NMLS and instead seek the right land property for a custom home.

As an aspiring homeowner, a construction loan is a way to deal with high home prices and a competitive market. A construction loan can be helpful if you’re planning to build or remodel your home. It can provide the financial backing you need to get started, and you can pay it off over time as the work progresses. The approval process and building process will depend on who you choose to work with, but this is a great loan program to help you select the perfect piece of real estate so you can get building right away.

Unlike a typical mortgage loan or refinance application, construction loans work differently. Finding the right lender, researching the loan programs, and even running the numbers through calculators can put you on the right path for construction financing so you can create your dream home.

A construction loan is quite different from a traditional mortgage, and it can be tricky to navigate independently. That’s why it’s important to work with an expert who can help you through the process and ensure you have all the information you need. Reach out to us today for consultation on your construction loan needs. 

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Advantages to choosing a construction loan in Colorado

When it comes to building a home, many people think of the cost of materials and labor while forgetting that the financing portion of the total project costs can be significant.

Since construction loans are generally fixed-rate loans, your interest rate will stay the same for the life of the loan, which can provide some stability in your monthly payments. This can be especially helpful if interest rates rise during the term of your loan. Additionally, a fixed rate may be a good choice if you stay in your home for a long time since it offers predictability and consistency in your monthly payments.

Construction loans are typically secured by the financed property, meaning lenders have higher confidence in the borrower’s ability to repay the loan. This provides stability for the borrower and reduces the risk of default. In addition, since most borrowers are using their own money to build the home, they will be less likely to walk away from the project halfway through.

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5 Best Colorado construction loan lenders in the state

1. Bank of Colorado

We think the Bank of Colorado has a solid construction loan product worth considering as you are comparing the various lenders in the marketplace.

The details provided to us about the Bank of Colorado construction loan included some special terms:

  • Single-close construction loan (will allow you to save money on closing fees).
  • Fixed rates for 5, 7 or 10 years
  • Rates locked after construction is complete
  • Local decision making

When you’re ready to connect with a loan officer, use our form to quickly match with construction loan programs based on your specific circumstances.

2. California Bank and Trust

We found the California Bank and Trust construction loan product specifically interesting because it allows you up to 24 months of construction time, which means that you won’t have to worry about delays in a construction timeline. There are also many other interesting aspects about their program, including financing up to $6,000,000.

We reached out directly to a loan officer at California Bank and Trust to get specific details about their construction loan and here’s what we found:

  • 700 credit score required
  • 20% down up to $2,400,000
  • 25% down up to $3,600,000
  • 30% down up to $4,800,000
  • Loans up to $6,000,000 are available
  • Major renovation loans are available 
  • Up to 24-month construction term followed by a 30-year ARM of your choice (3/1, 5/1, 7/1, & 10/1)
  • Rate protection with one qualification, one appraisal, and only one set of fees/costs
  • Fund control oversight and project progress completion monitoring with reports detailing loan disbursements for your records
  • Competitive rates
  • Interest-only payments during the construction phase

When you’re ready to connect with a loan officer, use our form to quickly match with construction loan programs based on your specific circumstances.

3. Elevations Credit Union

If you’re looking for a credit union to help finance the construction of a new home, Elevations Credit Union is a Colorado financial institution with over $3 billion in assets and more than 170,000 members. They have a robust construction loan product.

We were able to get more details than normal about the Elevations Credit Union construction loan and are happy to summarize the most important elements for you:

  • Loans available up to $7 million
  • Competitive variable interest rates
  • Your land’s equity contributes toward the project’s down payment
  • Interest-only payments on the amount you draw while you build, so you can conserve cash flow
  • In-house underwriting, approvals, credit decisions and construction draws for a faster process
  • Lending professionals with deep knowledge of Colorado markets and strong relationships with local builders
  • Construction loan and mortgage services all in one place, so you can easily transition to a new mortgage
  • We finance primary residences, second homes and investment properties, plus remodels of current homes.
  • Get approved for your construction loan and prequalified for your new mortgage by providing your project’s budget from your contractor and anticipated final home value from an appraiser.
  • Make payments to your builder from the loan as key milestones are reached. During this time, you make interest-only payments on the amount drawn from the construction loan.
  • Once you receive your Certificate of Occupancy, the balance of your construction loan is rolled into your permanent financing, and you’ll begin making monthly mortgage payments.

When you’re ready to connect with a loan officer, use our form to quickly match with construction loan programs based on your specific circumstances.

4. The Pueblo Bank and Trust Company

The Pueblo Bank and Trust Company has been around since 1889 serving the needs of Colorado’s citizens when it comes to the full range of banking services. They are a major player in the construction lending space as well.

We contacted The Pueblo Bank and Trust Company to get some details about their construction loan. Here is what they said:

  • Short-term draw note, typically 6 to 12 months in length, used to fund the cost of building a home or business facility.
  • The construction project is used to secure the loan.
  • Monies are advanced as work is completed.
  • Construction loans are made to both individuals and contractors.
  • When you secure a construction loan from PB&T Bank, you can expect personal, friendly and individual service, competitive rates and weekly draws.

When you’re ready to connect with a loan officer, use our form to quickly match with construction loan programs based on your specific circumstances.

5. Wintrust Mortgage

Wintrust Mortgage is one of the top 20 bank-owned retail mortgage originators in the country that originates in excess of $4 billion in loans annually in all 50 states. 

Recently we asked Wintrust Mortgage to provide us with details on their construction loan and this is what they said:

  • One-Time Closing. Only pay the closing cost once
  • Lock in your rate upfront and avoid interest rate risk
  • FHA, VA, and Conventional options
  • 0% Down up to $822,375 (VA ONLY)
  • 3.5% Down up to FHA County Limits ($356,362-822,375) 
  • 10% Down on Second homes
  • FICO 680+
  • Loans must include building no Lot/Land Loans 
  • Maximum of 10-acres per build site
  • Stick Built and Modular Homes ONLY
  • NO log homes or metal homes (barndominium)
  • Tear Down and Rebuilds do qualify
  • No self-build or owner builders. The builder must be approved. 
  • Does Not allow ADUs (Accessory Dwelling Unit – Granny Flat/Garage Conversions/Basement)
  • Now lending in all 50 States

When you’re ready to connect with a loan officer, use our form to quickly match with construction loan programs based on your specific circumstances.

Should you use a Colorado construction loan to build a new home?

Construction loans can be a little more difficult to obtain than traditional home loans, but they’re not impossible. Here are some tips to help you successfully get a construction loan in Colorado.

Lenders want to know that you have a good idea of what you’re doing and a realistic plan for how you will complete the construction project on time and within budget. If you demonstrate that you know the process and have everything under control, you will likely be approved for a loan.

Lenders will look at your credit score to determine whether you’re a good risk for a construction loan. If your credit is less than perfect, work on improving it before applying for a loan. With a good credit score, you can expect to receive a lower interest rate on your construction loan. This will save you money in the long run and make it easier to afford your new home. Another benefit of having a good credit score is that you may be able to get approved for a larger loan amount. This will give you more flexibility when financing your new home.

Therefore, a construction loan can help make building a home much easier. By following the tips above, you can increase your chances of being approved for a loan and completing your home construction project. If you are considering a construction loan, contact us for expert consultation.

If you’re looking to explore construction loans in other states, check out our national guide to construction loans and get started exploring all 50 states.

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Joshua Holt

Joshua Holt is a licensed mortgage loan originator (NMLS #2306824) and founder of Biglaw Investor. His mortgage expertise lies in the areas of professional mortgage loans, particularly for lawyers, doctors and other high-income professionals. Prior to Biglaw Investor, Josh practiced private equity mergers & acquisition law for one of the largest law firms in the country.

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