5 Best Construction Loans In New York


Finding the best construction loans in New York can be a daunting task. Read on to find the best construction loan lenders that cater to your building or renovating needs.

New York is the Empire State and has one of the highest per-capita incomes of all the states with the average New York resident earning over $100,000 per year. Known for the New York City skyline, Niagara Falls and its many lakes and mountains, it’s not a surprise that many people in New York consider building a new primary home or vacation home at some point in their lives.

Real estate experts report that it can cost up to $300 per square foot to build a house in NYC, whereas the typical price of building in other parts of New York outside Manhattan and Brooklyn range from $100 to $200 per square foot. Meanwhile, the median sales price in the state is $480,000 according to the New York State Association of Realtors

With such high median sales prices, it’s good that there are several construction loan options to consider if you’re planning to build a house. Building your dream home takes time, patience, and financial resources. In New York, you must ensure that everything is in place due to complex regulations and requirements, such as complying with state building laws, environmental laws and state codes. 

Rather than trying to go through a refinance or trying to get a traditional mortgage loan for a family home, a construction loan from construction lenders may be better for your needs.

Unlike traditional mortgage loans, borrowers using construction loans can decide on where in their home to remodel from the ground up. The approval process depends on the individual bank, but you’re often able to get through more short-term construction projects once approved for this loan.

As you go through the process of building a home, you’ll want to work with a loan officer that has years of experience doing construction projects. Unlike a traditional mortgage, construction loans have different requirements and procedures that will make you grateful to work with someone who has been through the process many times before you.

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Benefits of a new construction loan in New York

Every person thinking about building a home understands the pressure that construction brings. From the land to the foundation to the final structure, a construction loan covers the cost of building or renovating your house. Finding the your dream single family home on the NMLS can be exciting, but it can also be frustrating if you realize you need to make some changes to customize it. If you want to carry out big projects on your intended purchase, home construction loans can help you achieve these goals quickly.

Unlike typical home loans, a lender will disburse the funds to your contractors through a series of draws that come as each stage of the project is completed and inspected by the bank. In other words, you’ll qualify for the funds upfront but your lender will make small installment payments in the various stages of the project. 

Once the project is completed, your construction loan will turn into a permanent loan that functions more like a traditional mortgage. You’ll want to understand the details with your bank before you commit to anything as various banks handle this conversion process in different ways. Doing some research on loan rates, loan terms, and credit score requirements is a good first step for home construction loans.

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5 Best banks in New York for construction loans

If you’re in the market for building a new home in New York, consider these construction mortgage loans that are available to state residents.

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 spoke to a TD Bank loan officer who personally closed over $300 million of mortgages last year to learn more about the TD Bank construction loan program. Here are the details:

  • 720-740 FICO 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 rate and ARMs are available
  • Purchased lot considered in the down payment
  • No pre-payment penalties
  • Interest rate locked before construction 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. PCSB Bank

PCSB Bank is located in lower Hudson Valley New York and provides a wide variety of financial products to its customers. Founded in 1871 inside a general store in Brewster, New York, PCSB has come a long way to where it is today.

We reached out to PCSB Bank to learn more about its construction loan product. Here is what we found.

  • Interest-only payments during construction.
  • Added scrutiny. Sounds like a bad thing, but means that the bank will help oversee the builder to make sure the project is completed correctly.
  • Spec construction options with flexible terms are available.

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. Wallkill Valley Federal Savings and Loan

Wallkill Valley Federal Savings and Loan is a regional lender in upstate New York that handles a variety of financial products, such as checking and business accounts, for its customers. They also have a construction loan for those looking to build outside of New York City.

We reached out to Wallkill Valley Federal Savings and Loan to learn more about their construction loan. Here are the details.

  • Construction to permanent loan available
  • 10% funds disbursed when foundation is completed
  • 30% funds distributed for framing, sheathing, windows and doors
  • 30% distributed to finish roofing, rough plumbing, wall and ceilings, sheetrock and sewer system
  • 30% distributed to finish plumbing, electric, kitchen and bathrooms and exterior/interior painting.

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. Walden Savings Bank

Walden Savings Bank was established in 1872 and is the 11th oldest federally chartered mutual savings bank in the country. Mainly serving the Hudson Valley region, this would be a good option if you’re looking to build a house in upstate New York.

We reached out to Walden Savings Bank to learn more about their construction loan. Here is what we found:

  • Fixed and Adjustable Rate Mortgages available
  • One time closing
  • Allows you to be the general contractor
  • Up to 85% financing of the completed home value
  • No points required
  • Up to 12 month construction period
  • Available for first time homebuyers
  • Loan amounts up to $484,350 (higher for Jumbo mortgages)

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.

Does a New York construction loan make sense for you?

While it may come with a few challenges, a construction loan in New York can be a good decision if you’re committed to building a new home. Construction loans give you the freedom to choose the architect and contractor that you want to work with (so long as they are approved by the lender).

Whether it’s an expansion, significant renovation, or a new home, construction costs are high. This means you will need funds to make it a reality. You’ll also want to work with an experienced loan officer to guide you through the entire process.

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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