Where in TX? We are not owner builders but Prosperity Bank has been very easy to work with and is the only bank we found that offered construction to permanent loans.

What is in your closing costs? TX has some of the highest closing costs in the country. We did not find a single construction loan that did not come with a 1% origination fee. Your title policy is probably up there in expense as well. When did you purchase the land? I don't remember the timeframe but if it's been within a certain amount of time and you use the same title co as when you purchased, you will receive a credit toward the new title policy in the amount of the original policy.

heyo -- I'm in College Station. I actually have been trying to work with Prosperity Bank, but they will only work with a third party builder. Frustrating.

Yes, we do have some high closing costs, and I LOATHE the required $3500 "title insurance" that is required. But that's another rant for another day....

Any other owner builders in TX who have found a decent deal??? I'm really keeping my fingers crossed for a good referral from here :)

I should have known when you said howdy. Just got back from a trip to CS a couple hours ago. FTA c/o 06. Good luck.

Hi, We're in South Texas (RGV). We bought our land last summer and we're still in the design phase for our house (almost done).

We haven't even looked into construction loans yet but I've read most banks in Texas requires an owner builder to have a General Contractor to get a loan. Also if you happen to be a Veteran, there is the Texas Veterans Land board who will finance land for 5% down and 6.75% interest. Closing cost were pretty cheap too. They also have home loans and take out loans for new construction but they don't offer construction loans.
Gook luck with your build!

Since TX has virtually no actual requirements to register as a contractor, you might try going that route to see if it helps the OB situation.

Check out baker mortgage in Houston. We did our refi with them and it was great. Haven't done a construction loan but they advertise they loan all over Texas.

Thanks for the input folks. There are plenty of banks who provide excellent financing out there. The challenge we are having is finding one that will finance OB projects at a normal rate. Many of them have higher APRs (like over 9%!!!) or origination fees around 10K.

I've actually found two banks already who can work with me, but I'm not pleased with the fees/APR that they charge.

Was hoping someone here would chime in with a bank they've used as an OB that provided normal rates rather than let-us-stick-it-to-you rates

Higher risk for the bank comes with higher rates. They prefer to deal with an experienced construction professional. You should really calculate the cost differences in OB with the higher rate and using a builder at the lower rate. It might make up quite a bit of the cost difference plus give you a lot less responsibility.

So, who were the two banks that you found that will work with OB?

I am a mortgage broker that works in this special owner builder construction loan. Interest rate varies from 5.5% to 7% ( most common is 6.0%) and most of my lenders are 90% of total cost.

Yes closing costs are expensive for several reasons ... the lender only has this loan about 8-12 months so they offer no credit, the lender is going to charge a construction inspection & origination fees, there is no seller in the transaction so you have to pay for the title policy.

If someone needs this type of loan we can help .... Mega Mortgage of Texas