5 Best Construction Loans in Oregon


Construction loans in Oregon are available in a many different options depending on the lender you select and your personal finances.

Oregon has a long history in the United States, having been admitted to the union prior to the Civil War. The state is home to more than 4 million people living across 98,000 square miles, making it the 27th most populous state. Oregon’s only national park, Crater Lake, is the deepest lake in the United States.

With so many residents and tourists, it’s no surprise that housing prices are increasing. According to the Federal Reserve Economic Database, the house price index for Oregon was 20% higher than it was for the same quarter in the prior year. Many people are turning to construction loans as a way of financing a new build rather than bidding on limited housing inventory in the state.

Finding the right real estate has never been more challenging for those moving to or moving with Oregon, which is why many different kinds of borrowers are looking for alternative financing options. Once you spot and save the perfect place on the NMLS, you might have some ideas about short-term projects a home builder could help you with, and home construction loans can make this a reality.

But where do you get the money to build a home? Since the home doesn’t yet exist, there’s no collateral to put up for the loan. That’s where construction loans can be a great solution. There are many lenders in Oregon that are experts in construction loans. They can show you that these loans are easier to get than you may think.

As you navigate the world of construction loans, you’ll want to work with a loan officer at the bank that has extensive experience with these types of loans, as they are much different than traditional mortgages. In this article we’ll walk you through the pros and cons of construction loans, along with the lenders we uncovered during our research who are providing construction loans in Oregon.

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Advantages to taking out an Oregon construction loan

Oregon construction loans can finance most of the steps for building your new home. These steps include:

  • Purchasing the land
  • Taking care of permits and fees
  • Closing costs
  • Labor and materials for construction

Depending on the lender, these loans may include other steps such as home design and more. 

Construction loans aren’t only for new construction. You can use construction loans on the home you already have. Maybe a new addition or remodeling will make your current home into your dream home. Or, you could purchase an older home that’s less expensive with a conventional mortgage and then use a construction loan for renovations. Either of these strategies could save you a lot of money over purchasing a new home.

Construction loans have advantages over some other types of loans used for remodeling or renovations. Many people use a home equity line of credit or a home equity loan for new construction on their existing home. The amount you can get for these loans is based on the current equity you have in your home.

With construction loans, the amount of the loan is based on the estimated future value of the home when the renovations are complete. This can cause a significant increase in the loan amount you receive over home equity loans. Using a construction loan for renovations can substantially increase the value of your home after the construction is complete.

As you look through construction financing options, make sure you keep notes about loan terms, loan rates, and the monthly payment requirements from each lender.

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5 Best Oregon construction loan lenders

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

1. Oregon State Credit Union

Oregon State Credit Union was started in 1954 by an associate professor at Oregon State University. It now has over a billion dollars in assets and thousands of members. Perhaps not surprisingly, they provide a construction loan product (among many other financial services) to Oregon citizens.

We wanted to know more about Oregon State Credit Union and their construction loan, so we reached out and here’s what we found:

  • One-close construction loan offered
  • $500 reduction off lenders fee for Premier Members
  • Smaller monthly payments in the beginning because you pay only the interest during construction
  • Flexible terms of 15, 20 and 30 years
  • Locally serviced loan: Talk to a real person and make your payments locally
  • Having your construction loan and traditional mortgage loan in one closing provides a financial benefit
  • Down payment as low as 20%
  • If you own the land, your land may be used towards your 20% down payment

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. Washington Federal Bank

Washington Federal Bank (WaFd) is a regional bank but has offices throughout the southwest and northwest covering eight states. Based in Washington, they also lend in Idaho and have a construction loan product worth exploring.

We reached out to someone in the Idaho office of WaFd to learn more about their construction loan and here is what they said:

  • Payments quoted may include estimates of taxes & insurance, so actual payments may be higher.
  • Loans are subject to credit approval.
  • Rates for owner occupied homes only.
  • We handle all draws and inspections during construction.
  • All-in-One Construction to Permanent Loan, construction and permanent financing are conveniently rolled into one loan, so the permanent interest rate is locked in before you break ground.
  • Has a cross-collateral loan program, where you may be able to wait to sell your current home until after you move into your new home.

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. 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.

4. Umpqua Bank

Umpqua Bank is the largest bank headquartered in the Pacific Northwest with nearly $30 billion in assets and 200 locations across Oregon, Idaho, Washington, California and Nevada. They offer the full suite of financial products, including construction loans.

We contacted Umpqua Bank to get additional details about their construction loan. Here are the main points summarized for you:

  • From quick fixes to fixer uppers to brand-new construction
  • Homebuyers can combine a construction project budget into their home loan
  • Homeowners can refinance their home loan based on the appraised value after updates to pay for renovations
  • All construction and renovation financing options offer only one loan application and one closing
  • Financing available for primary residences, second homes, investment properties, accessory dwelling units (ADUs), manufactured homes, modular homes and condominiums
  • Options range from simple home updates, energy upgrades and minor repairs, to major renovations and new construction

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. US Bank

US Bank is a large lender with a solid construction loan option. They can’t work with owner-builders, investment property, or manufactured homes, but if you fall outside of that category (e.g. a primary residence or a second home), then you may like the options.

We reached out directly to US Bank to get details on their program and this is what we heard back:

  • 720 credit score required
  • 10% down up to $750,000
  • 20% down up to $1.5 million 
  • 25% down up to $2 million
  • Loans up to $10 million are available 
  • Primary residence and Second homes only
  • May use lot purchase as a down payment
  • Major renovation loans are available
  • 12-24 month Build periods are available 
  • 30 year fixed One-Time-Close or ARM (5/1, 7/1 & 10/1)
  • One-time closing automatically converts to permanent financing at the end of construction
  • Interest-only payments during construction
  • No prepayment penalty
  • No Spec or Investment Builds
  • No Pre Starts

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.

Here’s what you need to know about an Oregon construction loan

Whether an Oregon construction loan is a good idea will depend on several factors:

  • Your credit rating
  • Your debt to income ratio
  • What your goals are for your new home
  • How much equity you have in an existing home

There are many other factors to consider, and that’s where an expert can help.

It’s important to realize that a construction loan will have a higher interest rate than a conventional mortgage. There are also two construction loan types: construction to permanent loans and single close loans.

You usually get a lower interest rate with the construction to permanent loan type. After 12 to 18 months, the construction loan will be over as the builders complete your home. You would normally get a lower interest rate for the conventional mortgage that’s used to pay off the construction loan.

There are exceptions to this general rule. If you’re living in a time of rising interest rates, the conventional mortgage could have a higher interest rate than the construction loan’s interest rate. That’s where single close loans may be better. These loans automatically convert to a conventional mortgage. 

You’ll pay a bit more in interest for a single close construction loan, but if you feel uncertain about the future economy, this may be the right type of construction loan for you. Before deciding on a loan, be sure to consult with an expert. They’ll be happy to help create a loan strategy just for you.

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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