5 Best Construction Loans in Indiana


Construction loans in Indiana are available for those that want to build a new house rather than negotiate with sellers in the housing market.

Indiana is a great place to live if you are looking for quality housing. One of the best things about Indiana’s housing market is that it is constantly expanding. While it may only be the 38th-largest by land area, lots of people call Indiana home as it is currently the 17th-most populous state. This means that there are always new homes being built and neighborhoods being developed.

The downside to Indiana’s real estate market is that prices are rising. According to the Indiana Realtors Association, the median sales price in the state currently stands at $224,000 and has been growing at a steady pace of 17.3%. Many homeowners are hesitating as to whether they want to get into bidding wars for existing homes.

As an alternative, the state is seeing an increase in interest for home construction loans versus home loans as many homeowners decide to either build a new home or renovate their existing home. Why buy an existing property when you can build your dream home?

Getting the correct information about construction loans is vital to making the right decision. You are especially going to want to work with a loan officer that has experience with construction loans. These types of loans are different from a traditional mortgage, meaning you’ll want the expertise of someone who focuses exclusively on construction loans versus mortgage loans to help you through the process.

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Pros of using a construction loan in Indiana

New construction loans offer several benefits over other types of conventional loans. Perhaps the most significant advantage is that you’ll have a bank standing behind you during the construction phase—and with a vested interest—in making sure the house is completed correctly and on time. This can be especially helpful if you haven’t built a home before and would benefit from having a bank make sure everything is done correctly.

Another benefit of a construction loan is that you will have complete control over the project. Building your own home and choosing the land gives you start-to-finish control over designing a project that meets the needs of your family. 

Of course, the downside of a construction loan is that it can be complicated. Building a home takes a lot more effort than buying an existing structure. You’ll want to learn about construction loan programs, understand the entire process and choose a lender before breaking ground.

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5 Best Indiana construction loan lenders

1. Warsaw Federal

Warsaw Federal started in 1893 in Cincinnati, Ohio but now offers services in many locations throughout the country, including Indiana. They’ve been providing mortgages for over 100 years, so naturally can assist with your construction product.

We corresponded with a loan officer at Warsaw Federal to learn more about their construction loan options and here is what we found:

  • Minimum 700 credit score required
  • 5% down up to $548,000
  • 10% down up to $900,000
  • 20% down up to $2,000,000
  • 25% down on Lot Loans
  • One-Time Closing! Short-term loans convert to permanent financing at the end of construction
  • Construction periods of 8-12 months
  • 5/1, 7/1, 10/1 adjustable rate mortgages (ARMs) amortized over 30 years
  • Both stick-built and modular homes are eligible
  • No Self Builds must use an approved builder. 
  • The loan balance may be paid down until the final draw, reducing the loan amount and the monthly payment will be based on the new principal balance.

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. Old National Bank

Old National Bank is an American regional bank with nearly 200 retail branches and based on Evansville, Indiana. Known as “your bank for life”, Old National Bank has products for both a construction loan and land loan.

We contacted Old National Bank to learn more about their construction loan and this is what they had to say:

  • One-Step Construction Loan offers simple, flexible financing.
  • Lock in a fixed rate for your construction period and permanent term, while saving on closing costs.
  • Enjoy interest-only payments during the construction period, up to 12 months; amortizing payments begin after construction period ends.
  • Choose from a variety of fixed-rate loan terms
  • Up to 90% financing available with mortgage insurance.
  • Save money with convenient one-time closing.

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. First Midwest Bank

First Midwest Bank can trace its roots back to 1870 and is headquartered in Chicago, Illinois. Mainly a regional bank for the state of Illinois, they have plenty of experience with financial products.

We contacted First Midwest Bank to learn more about the construction loan product they offer and here are the highlights:

  • Offers a construction to permanent loan
  • Lock in your interest rate at the outset of construction — not when the home is completed.
  • You also get the financial flexibility to afford building your new home while living in your current one.
  • Can lend with as little as 10% down payment
  • Credit scores of 700 or higher,
  • Maximum debt-to-income ratio of 40% (debt from home equity loans, credit cards, lines of credit and other mortgages)
  • Can include land loan in the construction loan

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. Huntington National Bank

Huntington National Bank is headquartered in Ohio but operates in 11 states, including Indiana. They have more than 1000 branches and serve consumers, small and middle-market businesses, corporations, municipalities and other organizations. You won’t be surprised that they also offer construction loans.

We contacted Huntington National Bank to learn more about their construction loan product specifically. Here are the important details:

  • One-time-closing construction loan.
  • After construction, you can modify it for permanent financing.
  • If interest rates improve during the lock period, you can exercise the “float down” option to take advantage of the lower rates.
  • ARM options include a variety of terms with interest only during construction. Plus, you can refinance to a fixed loan after completion.

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
  • First-time homebuyer (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+ for credit approval
  • 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.

Is an Indiana construction loan a good idea?

Construction loans are a great way to finance your project, whether it‘s a new home construction project or renovations to an existing home. With the proper considerations, you can make the process as smooth and easy as possible. Keep the following in mind when seeking a loan: 

  • If you don’t have adequate information about construction loans, consult a professional loan expert or continue researching. 
  • Make sure you have a good credit score by paying down credit cards and lines of credit, as well as reviewing your personal loans, before applying for a loan because lenders will only consider borrowers with solid scores.
  • Ensure you have a solid construction plan. Having a plan will help you know exactly what to do and when it needs to be done, saving time and money.
  • Make sure that the amount of the loan is enough to cover the cost of construction.
  • Go to reputable lenders who have a good track record.

If you’re looking to explore construction loan rates 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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