5 Best Construction Loans in Rhode Island


Construction loans in Rhode Island are available to finance construction of primary or vacation properties, including renovation of existing properties.

Rhode Island isn’t an island but has several islands that are included in the state borders. Known as the Ocean State, Rhode Island is the second-most densely populated state after New Jersey, which surprises many people who don’t live there. With a little over one million people crammed into a little over one thousand square miles, there are a lot of buyers and not a lot of houses to go around.

Home prices were up by 7% this year and are expected to continue rising over the next five years. The median price for homes in Rhode Island is $420,000 according to the Rhode Island Association of Realtors. Meanwhile, local real estate experts are reporting that basic home construction costs in Rhode Island are between $120 to $170 per square foot.

It’s no surprise that many first-time homebuyers and real estate investors in Rhode Island are turning to construction loans as a way to finance building a dream home or vacation property. If you’re interested in learning more about construction loans in Rhode Island, then keep reading to learn everything you need to know. 

Show Me Lenders

Benefits of a new construction loan in Rhode Island

A new construction loan is a great option for borrowers who want to build or buy a home but don’t have the money upfront. It lets you get the financing you need to start building your dream home and then pay it back once you’ve moved in.

There are a number of benefits to getting a new construction loan. For one thing, it’s easier to qualify for than many other mortgage loans; you don’t need perfect credit or a high income to get approved. And because this type of loan is secured by the property that you’re buying or building, you can take out as much as 100% of your home’s value! That means if your home costs $300,000 and you’re approved for $300,000 in financing, you’ll have access to all $300,000 from day one.

Another benefit is that these short-term loans are often interest-only at first (meaning they don’t require monthly payments until after construction on your home is complete). Then once you move into your house and begin paying off what remains on your loan amount (plus any other fees that may have accrued during construction), your payments become fully amortized, just like any other mortgage payment would be under normal circumstances.

Get Quotes for Your Construction Loan

5 Best Rhode Island construction loan lenders

If you’re ready to check out the top construction mortgage lenders in Rhode Island, 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 single family home 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. BMO Harris

BMO Harris is the 8th largest bank in North America by assets and provides financial services ranging from personal and small business loans to wealth management and investment services. Among these many products, they also provide a construction loan for those looking to build or renovate a home.

We spoke directly with a loan officer at BMO Harris to learn more about their construction loan program and were able to get quite a lot of details. Here is what you need to know:

  • 700 Minimum credit score required
  • 10% down up to $1M loan amount (No PMI…720+ credit score required)
  • 20% down up to $2M loan amount
  • 30% down up to $3M loan amount
  • 35% down up to $4M loan amount
  • 40% down up to $5M loan amount
  • 45% down over $5M+ loan amount
  • 10% of the loan amount required for reserves
  • Primary residence and Second homes only (1 unit only)
  • Ground-up or tear-down construction utilizes Loans-to-Cost
  • Renovation utilizes As-Completed Value
  • 12-24 month construction periods are available 
  • 30/20/15/10 Fixed or ARM (5/6, 7/6 & 10/6) available
  • One-time closing automatically converts to permanent financing at the end of construction
  • Only 1 appraisal needed
  • 90 day lock same as 30 day pricing
  • Relationship rate discounts are available
  • Interest-only payments during construction
  • No prepayment penalty
  • No Spec or Investment Builds
  • No Builder Approval Required (must be licensed with General Liability coverage)
  • No owner builder construction loans
  • No Pre-starts
  • No Modular, Mobile for Manufactured homes

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. US Bank

US Bank is a large money lender with a solid construction loan option. They can’t work with owner-builders, investment property/multi-family home, 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 loan terms 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 Real Estate 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.

4. Dime Bank

Dime Bank has a history that reaches back to 1869 when the Connecticut Legislature approved the charter (the bank serves Rhode Island but is based in Connecticut). Originally, the bank required a minimum opening deposit of 10 cents! Times have certainly changed but the bank has a long history of working with people in Rhode Island.

If you’re interested in a construction loan, Dime Bank can finance the build of your home in Rhode Island. Here are some of the features of their construction loan product:

  • Primary residences
  • Home improvement loans available
  • Local customized solution tailored for your needs
  • Also available in Connecticut

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 Rhode Island construction loan make sense for you?

If you’re in the market for a new home, you might be considering a construction loan versus a traditional home loan to get the project started. But how do you know if this is actually the right choice?

Is your budget flexible enough to accommodate a higher monthly payment? Do you have enough cash saved up in your savings accounts for a down payment on your new home? Do you plan on living in your current house after construction wraps up?

Rhode Island construction loans are a great way to realize your dream of homeownership, but they aren’t right for everybody. Hopefully, this guide has helped you see some of the benefits of getting a construction loan so that you can make the right decision, given your unique situation. 

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.