I know that most banks have cut their construction loan programs especially for Owner-GC's. A constuction loan where the buyer does not own the land gives the bank a huge risk. If the person defaults, they have a partially complete house, that is essentially worth nothing to them. Raw land is better. Another issue is the jumbo cutoff is not in line with home prices. Certain counties have different cutoffs, but 417,000 seems to be the norm.

We actually own the land. And we have a builder that has gotten out of getting the construction loans himself, because the banks are advising him to let the homeowner get it in their name. He has had some homes that he built custom, and the homeowners got transferred before they could move in and he was stuck trying to sell in this crappy market. So they tell him to let us get the loan, but they won't let us have one!

No problems here. We just get the standard 20% down requirement but Bank of America wants 25%. We own our land and are planning on doing >>25% down including land equity.

I wonder if it is regional - our market is reasonable.

We also just got one, 20% down (they initially wanted 25% but made an exception for us). Regional bank (BB&T).

Keep trying and call other banks in your area. Ask them if they'll pre-approve you first before you go through all the trouble of submitting supporting documents. We got our Jumbo owner builder loan from a local bank two months ago. We used the land as the down payment with no cash required at closing.

Good Evening to all, For those of you who just obtained a jumbo mortgage, what is the interest rate that you are paying on the jumbo loan and then the construction loan?

O

I have a one-step Jumbo construction loan (one set of closing costs). The loan was for the land PLUS the cost of construction for the house. I'm currently paying 6% interest-only during the construction period. When it's done (hopefully in about two months) it will automatically roll over into a permanent mortgage. My permanent rate was set at 6.25%, however, with mortgage rates falling I have a call into my bank to get a lower permanent rate. Here in Washington, rates are averaging 4.875% (non-construction).

Whidbey - no one is getting 4.875% for JUMBO loans. The national average is more like 6.75%. 4.875% is a good number for conforming loans even below national average.

construction loan 5.5 interest only, permanent 4.75 , local bank

mdmomof3,

Where are you located and where did you get your loan? Did you have to pay any points to get a permanent loan for 4.75%

david, maybe I should have said here in the TOWN that I live in. My loan lady actually does a first and a second rather than one jumbo. That way you get the conforming rate for the first, and maybe a slightly higher for the second. We've done it twice, my mother-in-law is doing it now, and I know a few others in the process. 4.875%, 30-year fixed. All through the same bank, so maybe we're just lucky! :-)

omeyers- we were in MD, just moved to VA. Had to pay 1 point But figure we wont be moving in the next 10-15 yrs so the buydown will be worth it. Got it from Towne Bank. Looked around for a while. Everyone has programs they dont advertise. I checked with my coworkers, found out who they bank with and had good relationships with. Then I shoppped for about a month with 3 banks to find the best deal.

whidbey - that is not a jumbo loan. I stand by what I said. Most people don't get jumbo loans but do 2 separate mortgages to avoid the jumbo issues. FWIW - in my area, they are not allowing dual mortgages for construction loans.