Download the Construction Loan GuideGet our construction loan overview including builder questionnaire, loan guide, and origination overview.
Loan FeaturesEnjoy the advantages of a Members 1st construction loan.
Single Closing Costs
One set of closing costs where interest rates are locked before construction.
Interest Only Payment
Make interest only payments on the loan balance drawn during construction.
Receive our lowest rate possible between application and closing.
FLEXIBLE DOWN PAYMENT
Landowners can apply the value of their land toward their down payment to minimize upfront costs.
Homes being rebuilt on lots impacted by a wildfire will not be charged a lender origination fee.
What is Rate Advantage?
Rate Advantage provides construction loan applicants with added assurance and protection that they'll receive the lowest rate possible on their construction loan. After you have applied for your construction loan and you're ready to sign your closing loan documents, Members 1st will review all the daily loan rates published since the start of your application and award you with our lowest published rate during that span.
What is Rebuild Assistance?
Members 1st Credit Union is waiving the lender origination fee for construction loan applicants looking to build new or rebuild on a property that has been impacted by a wildfire. Whether you are the original property owner or new owner of a property impacted by a wildfire, you'll pay no lender origination fee on your construction loan, making it easier to rebuild the homes our community has lost from wildfires.
HOW IT WORKS
Our construction financing program features a 12-month term to build the home, with 5 draws throughout the process. Upon maturity, the balance of the construction loan will need to be refinanced into a 15, 20, or 30 year fixed-rate mortgage.
Every project is different, but in general, a construction loan pays for:
- Plans, permits, and fees
- Labor and materials
- Closing Costs
- Contingency reserves (in case the project costs more than estimated)
- Interest reserves (if you don’t want to make interest payments during building)
When you borrow money to build a house, there’s no collateral to back up the loan the way there is in a traditional mortgage — at least not yet. This is why there are additional steps involved in a construction loan as opposed to a traditional mortgage. Expect a thorough inspection of the architectural plans and your builder, as well as your finances.
Disbursement of a construction loan also works differently than with a traditional loan. Instead of transferring a lump sum, lenders pay home construction loans to the builder in installments, called “draws.” Each draw coincides with an important phase of the project, such as pouring the foundation, framing and finishing work.
An inspection is required before each draw disbursement to the builder. The amount of the disbursement is based on the work completed.
A mortgage is usually a transaction between a lender and a borrower, but construction loans add a third party to the mix: the builder. Your contractor is responsible for the completion of your construction plan on time and within budget.
Hire carefully when selecting your contractor. Review the contractor’s references and recent work they’ve completed. Check with your local builder’s exchange or associated for a list of licensed contractors. Make sure their plans and specifications are approved by the local building authority and a timeline has been agreed upon for completion.
Members 1st may request your builder’s work history and proof of insurance, plans, specifications, material list, a detailed budget, and a signed construction agreement that includes start and finish dates.
No, the property cannot be a manufactured or mobile home.
As money is drawn from your loan to pay your contractor, borrowers will begin to make interest only payments on their loan.
Yes, loan amounts can be structured to have provisional funds in the event you have changes or additions during construction as long as they’re in a good equity position.
Members 1st Credit Union has partnered with Members First Mortgages (MFM), a Credit Union-owned mortgage lender. Through our partnership, we can offer our members a variety of home loan options to fit their unique financial needs and goals such as:
- Conventional fixed and adjustable rate programs up to 30 years
- Government loan programs like FHA, Rural Development and VA (Veterans)
- Construction financing
- Jumbo loans and more!
You will work with a licensed and knowledgeable Mortgage Consultant at all stages of the process to help you navigate the mortgage process. Ready to get started? Contact us today at (530) 222-6060 x516.
Rates & Resources
30 Year Fixed - After Construction
30 Year Fixed - During Constuction
Interest Only Payments
*Last Refresh: 3/24/2023 10:16:02 AM
All rates displayed have zero points.
Rate floor is 3%.
Important Rate Information: This is not a quote. These rates are published weekdays near 10:00am EST. Interest rates fluctuate throughout the day and may be different at the time you apply and will likely differ based on your specific scenario. The information provided here is general and assumes only the following scenario: Purpose of the loan: Purchase a property. Property location: Redding, CA 96049 Property Type: Existing single family home Property Use: Primary Residence Estimated property value: $200,000 Estimated down-payment: $40,000 Loan amount: $160,000 (80% Loan to Value) Credit Score: 760 Escrow (impound) account is required. Rate lock period is 60 days. Fees: $3,000 to estimate closing costs in order to approximate an APR. For a quote with specifics to your scenario please click on rates which contain a link to a quoting or application tool.
Home Loan Services
Rate Advantage provides applicant with the lowest daily published rate between their application date and loan closing date not to exceed 60 days. Offer applies to Members 1st Credit Union (NMLS ID# 419964) loan applications for a single family, stick built, first lien, owner occupied residential purchase mortgage loan. Maximum LTV 95%. Minimum FICO 680. Eligible mortgage applications must be submitted between 3/11/2022 and 7/31/2022, and must close by 9/30/2022. Offer excludes no closing cost refinance products, FHA, VA, and RD mortgage loans. This promotion may not be combined with any other promotion or discount, coupon has no cash or trade value. All applicants are subject to approval under Members 1st Credit Union underwriting guidelines. Subject to change without notice. Additional restrictions may apply, visit m1cu.org for details. Down payments less than 20% of the loan amount may be subject to private mortgage insurance (PMI).