5 Best Construction Loans in Ohio


Construction loans in Ohio are available in a wide array of options depending on the lender you choose and your personal financial situation.

Construction loans can be an appealing financing option for buyers in Ohio who want to build their dream home but don’t necessarily have the funds to finance the costs. A construction loan can be used to cover the lot on which you plan to build, an architect’s professional design plans, the material, construction costs, permit fees, and closing costs. 

These short-term loans tend to have a higher interest rate because there’s a great level of risk for the lender. The good news is that the loan can often be converted to a traditional lower-interest mortgage after construction is complete.

According to local real estate experts, it costs a little over $100 per square foot to build  a home in Ohio depending on the complexity of the home build. This compares to an average sales price of about $277,452 across the state of  Ohio, according to the Ohio Realtors Association.

The qualifying process is a bit more complex and the lending requirements are more strict. Generally, you need a credit score of about 680 to qualify and 20 percent of the costs associated with the project, however, these numbers can vary among lenders and may be higher or lower. Refinancing, taking out personal loans, putting the repair or remodel costs on credit cards, or taking out a permanent mortgage might not be the right fit for your needs, or even tapping into home equity lines of credit. If you have already run calculators with traditional lenders like an equal housing lender and realized you’re not going to be able to accomplish what you want, it’s time to look at other loan options.

Before you start the process of building a brand new home in Ohio, you’ll want to connect with an experienced construction loan expert. These industry experts know the exact requirements and the process involved. They can tell you if you qualify for a loan and what your other options are if you don’t qualify. 

Because this is a costly investment, you’ll want to make sure you’re working with someone who knows the ins and outs of this type of financing. You’ll want to know when the loan closes, what the loan originator requires in terms of outlining the construction phases, construction loan rates, and more.

A home construction loan loan can walk you through what is required to get these loans in place. If traditional mortgage home loans are not the right fit but you have already found a dream property on the NMLS to buy in Ohio, consider taking out financing through a construction loan instead.

Show Me Lenders

Benefits of a new construction loan in Ohio

Ohio home buyers don’t have to just accept whatever limited inventory is on the market. It’s still a seller’s market, which means homes sell fast and buyers end up having to compete for a home. New construction eliminates these issues. With a rise in new construction as a way to combat the inventory shortage, construction loans have grown in popularity over the last few years. These loans provide buyers with the ability to build their dream homes.

Lenders pay a construction loan to the contractor instead of the borrower. It isn’t paid in a lump sum but instead disbursed in installments as building milestones are achieved. Here are a few of the benefits associated with getting a construction loan to build your Ohio home:

  • Construction loans cover all the costs associated with building a home –  not just the construction portion. They can also be used to renovate, repair, or make additions to an existing property. 
  • A construction loan can be used for both residential and commercial projects, which gives investors and homebuyers great freedom. 
  • The loans have flexible terms – more flexible than other loans.
  • Construction loans can be either fixed-rate or variable-rate depending on the market conditions. 
  • You can use the loan to finance the entire project from start to finish or just a portion needed. If you already own the lot and just need to finance the actual construction, a construction loan can be a great choice. 
  • Since loan funds are drawn in installments, you’re not making payments on the entire construction loan at one time. This can result in more manageable payments.  
  • There are no residency requirements with some programs. Therefore, you can use a construction loan to build a rental property or vacation home. 

If you are thinking a construction loan sounds like it may be the right option for financing your Ohio home, talk to an experienced construction lender. Because this type of loan doesn’t use the home as collateral, the lender requirements tend to be more strict. Expect the lender to be very involved in the process to ensure it’s following the projected timeline. They’ll want to thoroughly review your finances as well before extending loan approval. A qualified construction loan specialist can let you know if you meet the criteria. 

Get Quotes for Your Construction Loan

5 best lenders for a construction loan in Ohio

If you’re in the market to build or renovate a home in Ohio, consider these construction mortgage loans that are available to state residents.

1. Fifth Third Bank

Fifth Third is the largest bank in Ohio with over $169 billion in assets. Its name is derived from a merger in 1909 between Third National Bank and Fifth National Bank. Not surprisingly, they offer construction loans throughout the midwest, including to those of you in Ohio.

We contacted Fifth Third to get details on their construction loan and this is what they told us:

  • Available for the construction of a primary residence
  • Fixed rate and ARM construction loans available
  • Low rates during construction
  • Conforming and Jumbo Loan amounts available
  • One-time closing fee
  • Interest-only payments during construction
  • Land purchase can be included in costs

If you’re interested in connecting directly with a loan officer at Fifth Third Bank that specializes in construction loans, we can put you in touch with them directly.

2. 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.

If you’re interested in connecting directly with a loan officer at Huntington National Bank that specializes in construction loans, we can put you in touch with them directly.

3. 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 project 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! Loans convert to permanent financing at the end of construction
  • Construction periods of 8-12 months
  • 5/1, 7/1, 10/1 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 mortgage amount and the monthly payment will be based on the new principal balance.

If you’re interested in connecting directly with a loan officer at Warsaw Federal that specializes in construction loans, we can put you in touch with them directly.

4. Ohio University Credit Union

The Ohio University Credit Union (OUCU) got started in 1955 and now has over 26,000 members with $471 million in assets. If you’re interested in using a credit union in Ohio to finance your construction project, this could be the bank for you.

We reached out to OUCU to learn more about their construction loan. Here are some key terms and highlights:

  • 3/1 or 5/1 adjustable rate mortgage (ARM)
  • Up to 6-month construction term
  • Low down payment options available
  • One-time close
  • Financing available on developed, undeveloped and unimproved property
  • Low down payment financing on property developed with septic, water and electric
  • Low down payment financing on undeveloped property

If you’re interested in connecting directly with a loan officer at OUCU that specializes in construction loans, we can put you in touch with them directly.

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

If you’re interested in connecting directly with a loan officer at Wintrust Mortgage that specializes in construction loans, we can put you in touch with them directly.

Does an Ohio construction loan make sense for you?

Construction loans often have higher interest rates than conventional mortgages, so you’ll want to factor that into your budget. The lender can usually convert the construction loan into a conventional mortgage with a lower rate once construction is complete. You’ll want to discuss this with your lender.

Construction loans are usually short-term loans, which means you’ll need to have a plan in place for how you’ll pay off the loan if you’re not converting it to a mortgage. 

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.

Find a Construction Loan Specialist

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.

Save more money than your friends

One email each week covers personal finance, financial independence, investing and other stuff for lawyers that makes you better.