We have our current mortage with Wells Fargo and they are going to do our construction loan too. We are going the owner/builder route.

I'm surprised about Wells Fargo. Ours does not allow owner/builders. It was very aggravating because DH is a licensed contractor, and they still wouldn't allow it. They would let him build someone else's house, but not his own. Stupid. We had to have a friend who is a builder say he is the builder even though he really isn't. I hate WF, but that is an entiirely different thread.

We used Branch Banking & Trust (BB&T), which is a regional bank in the Southeast for our construction loan. AgSouth (formerly Georgia Farm Credit) also offers loans to owner/builders. We have our mortgage with them. Nearly all of our local banks will handle owner/builder construction loans and/or mortgages with very little trouble.

One question- do any of them allow for more than 12 months completion? I would like to build my next house (when, I don't know). If I do most of the work myself and hire a helper once in a while, it will take more than 12 months for me to complete.

Thanks,

Dave

Angela - What a wonderful resource you provided! We ended up going with a local bank for our owner/builder loan. But, they required a CA licensed general contractor to be listed as a consulting contractor on the loan.

I checked with the list of contractors they referred and they all wanted 12%+ of the cost of the house for their compensation! Not much benefit to being an owner/builder in that case!

We ended up finding a friend of a friend who would be our "consultant". He charged us $3,500 for the privelege of helping us get our loan.

I would have loved to have your list at the beginning of our project!

I was surprised how challenging it was as an O-B to get a construction loan. We finally found two regional banks through other O-Bs in our area that handle this type of loan. I guess these are pretty high risk, why loan a person with no experience in construction a significant amount of money to build a house? I have some construction background coupled with a fair amount of capital and was still surprised how difficult it was to get a loan.

I would tell you who I used, but I cannot give them a positive reference so I will keep it off the forum. You can tell where I live, if you are in my region PM me and I will give you a source. They used to be better, alot of our subs used to bank there as well, but some executive changes have been made and alot of the construction business have changed where they bank as a result.

Our local bank. No problems. And we had to get a 3 month extension to complete construction...Again, no problem...just a bit more in fees.

I don't think it's so much that they are high risk. It's that they are a very labor intensive loan for a bank to administor. Lots of upfront work and no real way to automate the draw process Unless a bank is big enough to make enough construction loans to owner builders, they can't justify having a specialist on staff

We went with the Fort Worth National Bank branch in Arlington, Texas. They were very easy to work with. We went through the Owner Builder Network and this is one of the banks they have a relationship with. I don't know for sure if they would do a loan for someone who is building on their own without OBN, but they may.

American Home Bank (Pennsylvania) has a large variety of construction loan products.

Angela, i'd like mroe information on Mid County Bank. Do you know if they service Illinois?

I'm bumping this up to see if there are any others to make additions to this great resource. We are in Washington state (Puget Sound area) and still in the process of finding and deciding on a bank to finance our DIY O-B project. My DH teaches home construction, so has lots of building experience and expertise, but doesn't have a contractor's license. I'm thinking the banks want someone with a bond to go after money if necessary, since one bank told us it wouldn't matter what trade he was licensed in (building, painting, excavation), just that they require a license. They obviously weren't looking for a certain level of house-building experience.

So far we've found WestSound (thanks to someone on this forum) and Timberland that will deal with owner-builders. There are a couple of others we talked to with good service, lower rates, and faster closing, but they require a licensed contractor to 'sign on,' then all drafts and paperwork would have to go through that person, creating work and expense that they'd have to pass on to us.

Timberland has a voucher method for payment that I'm unsure of, and I am worried about their bookkeeping--maybe just a technology problem. (We have our land loan through them and they can never tell me how much interest we've accrued--I always have to wait for the monthly statement--and they have improperly applied 2 of our payments.) The contact person we've dealt with there, though, was very helpful and creative when we needed help with the land loan. They do seem to be able to make individual decisions appropriate to individual customer needs.

WestSound is currently undergoing some changes with their construction financing, so I am waiting to see how that all works out, and checking for other options at the same time...so I'd welcome any other suggestions!

Our local bank handled our loan. Our loan officer said they normally charged an extra fee for an owner/builder but waived it in our case so I'm not sure how much extra they would have charged.

rhome, we just finished our house in March in Issaquah. We used Timberland Bank. I was a little worried about the voucher method, but it turned out to be pretty simple. The guy I dealt with, Gary Masterjohn at their Auburn branch was easy to work with. The only thing I would have done differently was to open a checking account with Timberland during construction. That way they will deposit your voucher checks to reimburse you for out-of-pocket expenses directly into that checking account. You will get your money about two days earlier that way.

Pretty much all the subs I dealt with had either worked with Timberland's system before or were okay with it. I was always sure to go over it with them as soon as I accepted their bid, so they weren't surprised. The construction loans are handled out of Spanaway. Typically, the turnaround time was two to three days from when the sub mailed his voucher in.

We considered West Sound, but we were informed by them that they were a quarter point higher than Timberland, because they allow draws at any time of the month. Timberland generally wants to pay after the monthly inspection (done by the 10th). They were always willing to make exceptions to this, though.

lisakk, Thanks for the info and report on your experience with Timberland. So it was no problem to pay cash/pay ahead for things, then get reimbursed? My dh knows different people who say they can get them good prices on things, but I'm sure that in most cases, when someone is willing to give you a good price, they want cash, not paperwork hassles. We will be buying materials, not really paying subs, since we will be doing all but 1 or 2 things ourselves.

We used our local credit union and the loan fee was $300, no fees for draws, etc., but rate is 8%. They have been fantastic to work with. I tried working with ownerbuilderfinance.com, they seemed okay but the fees were quite high and they worked with IndyMac. Since we are in a rural area, they (IndyMac) didn't like our appraisals.

We used a local bank (hometown-type bank) with no problems at all. In fact, they've been extremely helpful. They do four draws, 25% each - the first is done after the foundation is poured. We have a home equity loan on our current house that we had planned to draw from to pay for this up front, expecting the subs to want their money before the bank would be ready to do the draw, but they said that it was no problem if we needed to advance some early throughout the loan - just give them the contractor bid. Actually, I've been very surprised throughout the process of how easy the loan was to get - honestly expected more of a problem. Our rate was prime, and it will convert to a mortgage at completion with no extra closing costs, locking in a rate 90 days before completion.

DO NOT EVER-EVER-EVER USE WELLS FARGO BANK FOR A CONSTRUCTION LOAN!!!! It would take hours of typing to explain what they have put us through, but it has been horrible. When we finally gave up trying to convert it into a mortgage, we switched (at the expense of all the fees they charged us) to another company who has been wonderful. However, they also are fed up with Wells Fargo. They have been trying to get a payoff amount for the construction loan for 2 weeks and have gotten nowhere!!!! DON'T USE WELLS FARGO!!!!

I also had a very bad experience with Wells Fargo.

I read and lurk a good bit on a site dedicated to owner builders. I don't know if anyone has posted about them, but they are a valuable resource for anyone building a home.

It is OwnerBuilderBook.com

They have general forums dedicated to different aspects of building a home. One of those fourums is called "Financing". It has quite a few threads on finding financing and the trials and tribulations of finding a good lender for OB's.

Much of the information in the first post came from a thread on that board.

LOANS FOR OWNER BUILDERS

The site also has local forums and OB's can network with others in their area.

Here is a link that might be useful: Owner Builder Forums and Resources

To follow up on our own experience in the Puget Sound area: The only ones we found willing to deal with owner-builders were Timberland and WestSound. Besides having a branch in our town with a helpful loan officer, WestSound had less expensive closing costs and much less complicated paperwork...Their interest rate was the same as Timberland's. Their monthly draw system is very 'user friendly,' too. We are very happy we chose them.

I also suffered a delay of over 2 months waiting for Wells Fargo, and in the end after repeatedly saying "yes, we'll do your loan it's in process," they then said NO!

I went with CTX mortgage and they have been great.

Does anyone have any information on a construction loan draw sheet. I have a lot of contacts in the industry, and therefore want to subcontract a lot of the building process on my own. I have a builder that is willing to work as a construction manager, while i pull my own permits.
We are trying to come up with a fair way to pay him, and he wants to come up with a total fee if he were to complete the entire project. At whatever point i want him to stop, he will take payment based upon the percentage that the bank has let us draw.
what are your thoughts/

Wells Fargo is generally the worst lending institution out there. Avoid them at all costs for ANY type of loan.

Angela this is great info, Thank you. Loans of this type are going to vary greatly from LTV to LTC (loan to cost). If you own the land outright you should be able to get 100% paper for the construction. As far as being your own contractor this is where LLC's and P.O. boxes come in handy. What's wrong with your local bank? Anything under 750 is subprime and lenders are being extra particular these days.

Our local Savings and Loan would do the owner-builder, but only because they knew me. We went with Bank Of America (I am a long-time customer), but they farmed out the construction loan to SunTrust.

I am a mortgage broker and i work exclusively in Owner Builder loans if anyone ever has trouble obtaining financing for a Ownerbuilder project in the future and would like a free consultation feel free to message me at kylet@axisfinancial.net and i would be happy to give you free advice. i have funded projects nationwide and have years of experience in the field

Here is a link that might be useful: my website

We're going with Wells Fargo. The Builder Best product. We were pre-approved with a 1/2 hour consultation with our Loan Officer. Submitted zero paperwork (Approved even without 1099's or paystubs).....I'm sure there will be enough to sign when we lock in a rate and open the loan but so far it's been quick and painless.

Unfortunately I also chose to go with Wells Fargo Builder Best product (before I discovered GardenWeb forums)
I was pre-approved quickly also, but did come up with paystubs and plenty of other paperwork and statements etc.
Last month (about 5 months into build) my broker's assistant called and recommended I lock-in (which there was a 5,000 fee to lock in, which I wasn't told about up front). I did lock.
Now I've been trying for a week to set up a closing to perm
loan, and finally was emailed a nasty suprise from my broker last night... I was supposedly qual'd with a 10/1 INTEREST ONLY ARM for a portion of the mortgage, plus a prime+ HELOC for the remainder (the first portion is still far above jumbo, so it's not like he's trying to avoid jumbo rates)
I applied as owner/builder with my husband being the GC (25+ years as GC). I was told they don't normally do that, but he was sure he could get an exception. I had to submit more paperwork for my husband to get approved as a wells-fargo builder than I had to submit for my mortgage. A couple weeks later, he got a wonderful important package designating him as a Wells-Fargo builder, please let any future customers know... However, the DAY BEFORE I closed on my construction loan, I got a call saying he couldn't be MY builder...
I've also had several other nuisances along the way, like my disbursement specialist gone all of a sudden, and several weeks of different specialists until I was assigned another, who, while very nice, is very hard to reach...
Sorry for the rant, if anyone has any advice on how to get out from wells-fargo, Please let me know...
So, I'll add to the BEWARE or Be Careful when dealing with wells-fargo...

Bump this to the top for more feedback.

Anyone with luck in the Louisville, Kentucky area?

question for everyone I have land to build and a builder plus about 30% down but my credit sucks as low as 549-620 my husbands is about the same we both have good job history ive paid everything off its on my credit but it didn't help much we need to build our home asap im in southern Indiana is there some place that I go to get a loan for the rest to build our home? I know I may have a high rates but im ok with now until we can refinance it. please help someone tell me where to go and who to go to!

needtobuild - you would be better off if you started your own thread. This thread last had any constructive comments in 2007.

Oh I'm new to this dekeoboe... lol how do I do that?

Go to the top of the Building a Home forum (http://ths.gardenweb.com/forums/build), find this section and fill it out.

We currently live in Fort Myers Florida can anyone tell me if anybody knows of a bank that will do owner Builder in Florida

Anyone have any recommendations for an owner builder friendly lender in upstate New York? Looking for a construction to permanent 30 year mortgage.

I'd be very surprised at any banks doing that after the financial crisis. Notice this thread was started almost 15 years ago.

@cpartist we got one in Indiana. Hard to find a bank and lots of hoops to go through but do-able.

We used our local bank. My husband had project management experience from his time as a military officer, so that qualified him as a GC. This was 6 years ago.

@Trish Walter what was the bank you used in Indiana, I am in Indiana and looking for a source.

Anyone know of any banks that will finance in Massachusetts?

You are also spamming the site which is not allowed.

I am in the middle of a new build and my husband is acting as GC so we did not hire a licensed builder for our project. We got our loan through Navigant Credit Union which is located in Rhode Island and we live in Massachusetts.