5 Best Construction Loans in North Carolina


Construction loans in North Carolina are available in a wide variety of options depending on the bank you select and your personal financial situation.

North Carolina is home to Charlotte, the Outer Banks and the Biltmore Estate, making it a popular destination for those looking to live and vacation in the state. It’s also the 28th largest state by land and the 9th most populous state by population. The great weather, beautiful mountain and coastal views, and thriving job market makeNorth Carolina one of the most desirable places for young professionals, growing families, and retirees to live. From Raleigh and Charlotte to Asheville, Wilmington, and beyond, there are plenty of great places to find a dream home in North Carolina.

Once you save that perfect property from your NMLS search, you might discover that you want to make some changes to the property, and you might need to discuss a construction loan and credit approval requirements with a qualified lender.

With so many people and not enough land, it’s no surprise that housing prices are rising According to the North Carolina Realtors Association, the average single-family home in North Carolina is priced at $300,000. If you’re looking to forgo the negotiations between buyers and sellers and to build your own home, you wouldn’t be alone. For some, traditional home loans just don’t offer the ability to get into a home you want while making the changes necessary to customize that property.

Other loan options exist, such as getting a construction loan amount from a lender who is familiar with that process. These financing options help you build a custom home. Not every mortgage banker will offer a construction loan, since many choose to focus on permanent financing with traditional loans.

To finance these construction projects, North Carolina residents are using construction loans. These loans allow them to finance the cost of the land and the cost of designing and building the home. Real estate experts in North Carolina estimate that it costs between $78 and $120 per square foot to build a new home in the state. 

Construction loans are different from traditional loans in various ways. There are some pretty specific rules in regard to qualifying and drawing funds from the loan. If you’re a home buyer or builder in North Carolina in search of a construction loan expert, we can connect you with a loan officer that specializes in this type of financing. 

To avoid a costly and disappointing home-building catastrophe, you’ll want to ensure you’re working with someone who knows construction loans and the process inside and out. 

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Benefits of a new construction loan in North Carolina

Instead of settling for whatever is on the market, buyers in North Carolina are opting for new construction and building their own homes. Because of this, construction loans have become a popular option. They offer unique benefits and make a great option for building your dream home. Here are some of the benefits associated with a construction loan in North Carolina:

  • Construction loans can be used for various purposes, including building a new home. They cover all the costs associated with building a home –  not just the construction portion. In addition, they can also be used to renovate, repair, or make additions to an existing property. 
  • Construction loans can be used for both residential and commercial projects, making them the perfect option for investors.
  • Construction loans have flexible terms and can be either short-term or long-term, depending on your specific needs.
  • Construction loans can be either fixed-rate or variable-rate depending on the market conditions.
  • Construction loans can be used to finance a full project or just a portion of it. You don’t draw all the funds at once, which means you’re not making payments on the entire balance at one time either. 
  • Construction loans can be used to finance the construction of a new home and to purchase the lot where you intend to build the home.

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5 Best banks in North Carolina for construction loans

If you’re ready to check out the top construction mortgage lenders in North Carolina, 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 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. First Bank

First Bank is an independent, full-service community bank in business for over 80 years serving the state of North Carolina. They offer the full suite of financial products from checking to investment accounts, including construction loans.

We wanted to learn more about First Bank and their construction loan, so we contacted them and this is what we learned:

  • One-time-close construction to permanent loan
  • Can finance up to 12 months of construction
  • Adjustable-rate and fixed interest rate options available
  • No penalties for prepaying the loan and a single set of closing costs
  • Loans for construction only also offered

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. American National Bank & Trust

American National Bank & Trust Company started in 1909 in Danville, Virginia and has a long history of assisting customers in Virginia and North Carolina. With over 26 branches, there’s likely to be one near you if you’re in North Carolina.

We specifically wanted to learn about the construction loan offered by American National Bank & Trust Company, so we contacted them to gather the following details:

  • Construction-only loans available. Short-term financing, usually for up to a year. Can make interest-only payments during the term. Must be paid off at the end of the term, usually with a new mortgage loan on the house.
  • Construction-to-Permanent loans available. Starts out as short-term financing and then converts to a longer term mortgage after the new house is built. Offers the convenience and cost-savings of not going through a second mortgage application process and closing. 
  • If you currently own another home that you plan to sell after your new home is finished, you could potentially leverage that home to finance construction. Check how much equity you have in your current home to see if a cash-out refinance, home equity loan, or HELOC could be a viable alternative to a home 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. Peoples Bank

Peoples Bank is a full-service, hometown bank with an extensive array of products and services for personal and commercial banking needs. Based in Newton, North Carolina, the bank offers everything from personal to business to insurance products through its subsidiary insurance agency.

We asked Peoples Bank to provide more information about their construction loan specifically. Here are the highlights:

  • Interest-only payments during the construction period
  • No requirement to sell your existing home during construction
  • No second loan, no extra closing costs
  • Rate locks at the approval of construction financing

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 North Carolina construction loan make sense for you?

One of the main advantages of North Carolina construction loans is borrowers can use them to finance every aspect of the build, from the design to the materials. If you are considering a construction project in North Carolina, you’ll want to talk to an experienced construction lender.

Since the process is very different, the eligibility criteria are also different. You’ll need to meet a higher minimum credit score for a construction loan than a conventional mortgage loan. Construction loans also typically have higher interest rates than conventional mortgages, therefore you’ll want to factor that into your budget. 

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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