Question:

What is owner builder new construction financing?

Answer:

Owner builder new construction financing applies to people who are not hiring a general contractor for the execution of their custom built house project. Rather, they act as one without having a builder's license.

Who will offer owner builder new construction financing?

Not every construction lender will offer owner builder construction financing, but many will. They will require detailed drawings and budget and will require that the owner builder controls the realization of the construction project. The owner builder has to present the subcontractors he's going to hire, and the owner himself usually commits to certain tasks beside managing the process, additionally saving cash. With this type of new construction financing funds are disbursed according to budget and schedule, and interest accrues on the draws only. The owner builder usually makes interest-only payments during the construction phase, or none (possible with some programs).

The owner builder new construction financing may or may not include transformation to a long term mortgage after the occupancy stage is reached. However, it may be best to select a single-close construction financing to avoid extra closing costs.

Also, there are companies specializing in owner builder new construction financing. Those may be particularly helpful to the borrower matching them with the best financing options and providing process management support from Day 1 until completion of the project. If the owner is inexperienced in dealing with construction projects, but is willing to devote their time and efforts to learn, acquiring owner builder new construction financing through a dedicated owner builder consulting company may be an excellent choice.

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