5 Best Construction Loans in Maine

Maine makes me think of lobster rolls, summer along the coast, and skiing in the winter (at places like Sugarloaf and Sunday River). No wonder so many people call the state home and visit each year. As the population of Maine increases, housing prices are inching up according to US News and World Report and many people are considering the benefits of building a new home as opposed to negotiating with sellers on the open real estate market. 

If you’re interested in pursuing a construction loan, you may already own property or be thinking about purchasing property. The good news is that a construction loan can also finance the purchase of land.

So, what’s the difference between a construction loan and a traditional mortgage loan? There’s a lot actually. The rest of the article outlines some of the benefits, disadvantages, and lenders that you might want to consider working with as you pursue construction financing to build your dream home.

Advantages to taking out a construction loan in Maine

Are you planning to build a new home? Well, you’re in luck! A new construction loan is designed specifically for people who are building a home. It’s a great way to get financing for your project, and it comes with some interesting benefits that you should know about.

Here are two of the biggest benefits of getting a new construction loan in Maine:

1) You can start building quickly. When you are approved for a new construction loan, you get the access to the money upfront so that you can start building immediately. A lender will usually set up the payments to be made in draws as each stage of the construction project is finished.

2) You only pay interest during the construction process. Most construction lenders will only charge interest on the part of the loan that has been drawn. No actual principal payments are due until the construction is complete. You’ll still be paying your current rent or mortgage during the building of the house, but you’ll breathe a little easier know that you’ll only have to pay interest on the construction loan amount initially.

5 Best banks in Maine for construction loans

If you’re ready to check out the top construction lenders in Maine, here are the best options we’ve found through our research.

1. TD Bank

TD Bank is one of the largest banks in the country with over $600 billion in assets, making it the sixth-largest by deposits in the United States. Not surprisingly, TD Bank has a robust construction loan product and should be one that you consider before making your ultimate decision.

We reviewed the TD Bank website to learn more about the TD Bank construction loan program. Here are the details:

• 720-740 FICO credit score desired
• 20% down required on loans up to 1.5M
• 30% down required on loans up to 3M
• One-time close
• Primary or secondary homes are eligible
• Fixed interest rates and ARMs are available
• Purchased lot considered in the down payment
• No pre-payment penalties
• Interest rate locked before construction phase begins
• If land has been owned for at least 6 months, we will lend up to 80% of the appraised value of the entire project.
• If land has not been owned for at least 6 months, we will lend up to 80% of the land acquisition cost+cost of construction
• No Condos or Co-Ops. No investment properties.

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. Maine Savings Federal Credit Union

Maine Savings Federal Credit Union has over 30,000 members and more than $500 million in assets, making it one of the largest credit unions in Maine. They offer a full range of financial services and personal loans, including with their construction loan product. If you want to build a home with a credit union, you’ll want to consider their product.

We reached out to Maine Savings Federal Credit Union to gather more information about their construction loan product. Here are the details:

• Up to 90% financing
• Local Maine lenders
• Single close construction loans available
• Cost of land can be included in loan
• Requires a signed construction loan contract between the member and the contractor that outlines the total construction cost.

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. Skowhegan Savings

Skowhegan Savings is one of the oldest banks in Maine, tracing its roots back nearly a century and a half to one of Maine’s original governors. The bank used to focus on loggers, so it’s fitting that in today’s world they are now providing construction loans to help build houses.

We reached out to Skowhegan to learn more about their construction loan product. Here is what they told us:

• Single close construction loans available
• Lock in fixed rate at the time of application
• Up to 95% financing available with private mortgage insurance (PMI)
• Interest only payments for 12 months (if no PMI)
• A Skowhegan Savings Bank approved General Contractor is required to oversee and manage the project as budgeted in your contract (containing State of Maine requirements).

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. 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 the lending team at Wintrust Mortgage to provide us with details on their construction loan process 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 (First Time Home Buyer), VA (Veterans loans), 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.

5. Bath Savings

Bath Savings has been in business for over 170 years serving the Midcoast and Southern Maine region. Maine has some of the oldest banking institutions in the country! Bath Savings has been helping people build homes for centuries, which is pretty remarkable by itself.

We contacted Bath Savings to learn more about their current construction loan and here are the highlights:

• One-step home construction loans built right
• Interest-only payments during period of construction
• Monthly construction draws in accordance with work completed — keeping your projects on track
• No additional costs at the end of the construction period
• No prepayment penalty
• Optional escrows for taxes and insurance

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.

Does a Maine construction loan make sense for you?

A construction loan is one of the most common types of loans, and it can be a great way to finance large, expensive projects like home renovations or building a new house. But before you decide to get one, it’s important to understand all the details involved in applying for and getting approved for a Maine construction loan. Do they offer online banking? Can you use your home equity? What type of credit card debt do you have?

There are many benefits associated with taking out a construction loan. One of the biggest ones is that these loans can be used for everything from building a home from scratch to renovating your existing place. Another benefit is your ability to create the home of your dreams to your specifications. 

Looking for a construction loan in a different state?

Click on another state to find the best construction loan lenders in that state.