Construction Loans

Building the Future

Are you fascinated by the thought of building your dream home? Do you have design blueprints or ideas tailored to suit your lifestyle? Securing construction loan financing may seem daunting, but with the right guidance, it’s a feasible task. Whether you’re wearing the hat of the general contractor or you’ve hired a professional, financing for the construction process is a must.

Collaborating closely with a lender will help you gauge your affordability and establish your monthly payment. Once you’ve assessed your purchasing capacity, it’s prudent to deduct 10% from the total. This is because construction projects generally overshoot their budgets by about 10%.


Construction loans are structured to settle costs as they arise and are submitted to our office for monthly payment. Your initial disbursement, for instance, will cover the cost of your plot and the closing fees associated with your loan. If you’re planning a down payment, it will be executed on the day of your loan’s closing. Your funds will be expended before the loan starts being disbursed. During the construction, you’ll pay monthly interest on the loan based on the drawn principal amount. Consequently, your payments will rise each month as you draw from the loan to finance the construction.


The process of submitting receipts for payment to our office is termed as a draw request. All draws require approval from the borrower and verification from the lender. Additionally, your new home must be inspected intermittently throughout its construction. Inspections aren’t required for each draw but when mandated by the lender. Typically, inspections are obligatory when 25%, 50%, and 75% of funds have been disbursed. Our office at Ohly Law manages many of these inspections for lenders. Usually, appraisers don’t inspect the home until it’s nearly finished, providing lenders with a final inspection.


Payments to subcontractors are directly managed by Ohly Law Office, with lien waiver checks issued accordingly. At the loan’s closing, we ensure that all subcontractors receive their due payment as per the sworn construction statement. If the final inspection by the appraiser identifies unfinished work, funds will be retained in our trust account until the specified work is completed.


Construction loans offer several benefits to you and your builder, including:

  1. Interest on the loan is paid as you progress

    • Interest cost is not factored into the purchase price
    • You may be able to afford a few additional upgrades
    • Interest is tax deductible
  2. It allows the builder to free up financial resources for other projects

  3. Avoid extra fees or costs for the lot

  4. Save on closing costs

    • Builder’s closing costs aren’t included in the purchase price
    • Applicable fees may be tax deductible

Trust Ohly Law to guide you through the complexities of construction loans, helping you turn your dream home into a reality.