What does a typical timeline look like on a construction loan?

Shared by Ed Currie of Associated Bank - Initial content published March 2016

Everyone’s timeline will be different. Putting the appraisal aside, it generally will take a week or two to get the loan approved. The approval of the loan will work concurrently with the appraisal process.

The single biggest item that impacts how long it takes to close on your construction loan is when adequate plans and a budget are available. Because the construction loan appraisal is based on the plans and specs of the project, the appraiser cannot begin until those are available. You want to give yourself 30 days from when the plans and budget are available to order the appraisal before you close your loan.

Home Building NAIHBR couple with contract

The things that will have the biggest impact on how long it takes to close your construction are:

  • How long will it take to get all of the supporting items we need from you.
  • How long before the plans and budget are done so we can order the appraisal
  • How long will we sit in underwriting queue for approval
  • How long will the appraisal take
  • Will we have a tough time document ting something the underwriter needs
  • Will we have any appraisal delays or issues
  • The dreaded “unexpected”

Issues above aside, if everything goes as planned and we are able to order the appraisal right away or early in the process, the typical start to close time frame can be 30-60 days. If we are able to get all we need from the client right away and order the appraisal we’ll be closer to the 30 day time frame. If it takes a while to get items from the client and the appraisal can’t be ordered for a while, it will be closer to 60 days or longer. We’ve had a few clients that have taken a year to close due to delays in plans and changes in builders and budgets.

Ed Currie Associated Bank

Ed Currie

Associated Bank

Meet the Author ...

Ed Currie

Ed Currie began assisting clients with mortgage financing in 1994 during one of the slowest mortgage markets in the last 25 years. The slow market allowed Ed to develop his client-centric philosophy and drive to make the process as stress-free as possible. Since that time, Ed has assisted over 5000 clients with total loan production exceeding $1 Billion.

Why is selling a lot or teardown listing so difficult?

With interest rates near all-time lows, and home sales on the rise, one would think buyers would be snatching up lots and teardown properties left and right. But they are not. Why?

Vacant Land for sale

The realty is many buyers want to build new homes, but hesitate because they know nothing about the building process and it seems intimidating. Once they buy the lot or tear down where do they go from there? How do they find an architect, a builder, get permits, estimate costs, etc? The whole process can be overwhelming and it can discourage them from pulling the trigger.

In addition, the visualization a buyer has when looking at existing properties is not there to create an emotional attachment. In other words, buyers find it difficult to picture their new home complete on the lot. Logic says buy the lot, but the emotional appeal that actually brings them to action is missing and we all know that purchasing a home is a very emotional process for most buyers.

Whether you have a vacant lot listing or a teardown, the challenges can be great and the compensation low. NAIHBR can change that by providing two new marketing programs that get you more exposure and increase your commission amounts.

Whether you have a vacant lot listing or a teardown, the challenges can be great and the compensation low. NAIHBR can change that through its partnership with Proposed Properties by providing two new marketing programs that get you more exposure and increase your commission amounts.

Let's face it, real estate is a numbers and timing game. We need to find the right person at the right time who is interested, motivated and financially capable to get a deal done. Naturally the more offers we have in the market, the more opportunity we have to find that person.

That is exactly what Proposed Properties does when partnering with real estate professionals. We provide a second or even multiple options to market lots, tear downs or renovation candidates.

  • Proposed Properties helps you match lot and teardown listings with models that will compete in your market.
  • Proposed Properties helps you with communication between your buyer and the builders or renovation companies.
  • Most importantly, Proposed Properties helps you get paid

A Great Time to Rebuild Our Communities

A message from the Chairman

NAIHBR National Association of Independent Home Owners and Remodelers

As we launched our National Association of Independent Home Builders and Remodelers, also known as NAIHBR, each one of the founders had a reason to work together building a national platform that creates opportunities for builders, mortgage lenders, suppliers, and realtors to work together for the betterment of local economies. Homeownership has proven over time to be a powerful force for creating family stability and wealth over time.

Many of us grew up when the US population was under 200M in the ancient 1970s , and today it stands at 325M strong. We haven’t added any new states, but have added the need for more housing. We should reach 1.2M new new housing starts in 2017; but did you know this is less than half of the pre-housing crisis in the mid-2000s? The good news is new construction is on the rise fueled by consumer demand, low interest rates, and an aging housing stock. There are certainly tailwind behind the Construction / Renovation movement.

The economic value of home ownership has proven itself over the test of time. One of our Directors, Mike Wolson is with Baird and Warner, which was formed in 1855. Imagine back then, a new home was $1400! Now a new home averages almost $280 thousand.

We have seen home prices appreciate consistently through decades. Over the life cycle of a family’s time in a home, typically it has the potential to triple in value over 30 years while the mortgage typically finds its way down to zero. This means the value of homes can create a sizable asset that can be used for retirement, especially when the children are grown and out of the home.

When we read that the homeownership in the US is reaching 50-year lows, we all become disheartened that the long road to the “American Dream” has been challenged. We can either accept the rate will continue to fall or proactively work together on a better solution.

As new construction is almost one in six transactions, and the fact that there is $350B of renovation spend per year, we already have momentum on our side. As an industry we have the foundation with all the key players to address the housing shortage and lack of equity appreciation in many local markets (still over 3M underwater mortgages linger).

NAIHBR believes if lenders, realtors, builders, and industry leaders work together on creating a more efficient approach to serve the consumer, new construction and renovation will accelerate. Our hypothesis was tested in launching the organization in the Illinois market. Within 3 months of starting, we recruited 1000 members and recruited lender sponsors, builders, and built a leadership event with esteemed speakers such as Fannie Mae, Freddie Mac, National MI, and realty brokers.

At the end of the day, we understand the members of NAIHBR chose real estate as their profession that results in families creating stability and wealth accumulation over time. If we take the approach of advancing local solutions, we can get to a national approach to addressing our housing shortage and meet the needs of families for generations to come.

By doing good, we can all do well.

We look forward to working with each and everyone of you restoring economic strength in our communities. We look forward to sharing with you the many initiatives underway in the weeks to come.

Paul Imura

NAIHBR Chairman

More Evidence that the New Home Construction Market is Growing


The market for new home construction continues to grow.  Brad Finkelstein of National Mortgage News reported more economic evidence of a growing new home construction market in a March 14th article “New home mortgage apps signal strong market for homebuilding”.

According to Finkelstein’s article, February new construction loan applications grew 2.2% from a year ago and that Februrary’s volume was up 16% from the previous month.  That is great news for independent home builders as the existing inventory of home for sale to be constrained.





Inventory constraints are also driving interest in home additions and renovation opportunities according to a February 2017 survey of NAIHBR members.

New construction financing not catching up with housing market


In a short slide presentation, National Mortgage News recently published a  list of items constraining new construction financing (a reference link to the article is included below).  The six major factors included

  1. rising land cost due to market appreciation
  2. new construction credit remains difficult to obtain with most lenders
  3. shortage of qualified labor
  4. pressure from the rental market
  5. younger buyers are waiting longer
  6. Limited credit facilities are still hindering the market
New Constructoin

New Construction

NAIHBR members in a February 2017 survey reported findings consistent with some of the studies findings. Land lot prices and teardown opportunities have increased significantly over the last 12 months where many buyers who remained on the sidelines have now been priced out of the market.

Additionally, many builders named a lack of qualified sub-contractors as a current challenge to their business.  Since the housing crash, many skilled tradesmen were forced into other lines of work, leaving an demand gap for builders and renovating GCs.  Although market demand should eventually bring additional labor, for now labor costs for skilled trades is rising significantly.


About NAIHBR – www.naibrs.org/about/

National Association of Independent Home Builders and Remodelers

NAIHBR Working with Local Builders to bring Transparency to custom home building


The National Association of Independent Home Builders and Remoldelers (NAIHBR) has begun working with select builders to bring information and transparency to consumers interested in new home construction.  The program seeks to bring multiple options to consumers when looking at lots or teardown properties along with matching them with possible financing options.

The program seeks to educate customers on the difference between builder cost structures, allowances and other elements of home construction that currently cause consumer confusion.  The program is being rolled out by region beginning with the Chicago suburbs.

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