Let’s talk numbers — and how to make your dream home financially doable.

Building a home is an incredible opportunity to create something that’s truly yours — but before you break ground, you’ll need to understand the upfront investment.

One of the most common questions we hear is:
👉 “How much down payment do I need for a construction loan?”

The answer depends on your loan type, credit profile, and project scope — but here’s a clear guide to what most borrowers can expect.

---

✅ Typical Down Payment Requirements

For most construction loans, the down payment ranges between 10% and 20% of the total project cost.

This includes:

• Land (if financed)
• Materials
• Labor
• Permits and soft costs
• Contingency reserves

General Breakdown:

Loan Type	Typical Down Payment
FHA Construction Loan	As low as 3.5% (if eligible)
Conventional Construction Loan	10–20%
Jumbo or Custom Home	20–30% (based on size and complexity)

📘 At PRMI, we’ll review your full cost breakdown and help structure a down payment that fits your goals and approval strategy.

---

🏡 What Counts Toward Your Down Payment?

✅ Cash savings or checking
✅ Retirement accounts (401k, IRA, etc.)
✅ Equity in owned land
✅ Gift funds from family (in some cases)
✅ Grants or builder incentives (case by case)

💡 If you already own the land, the value of that land may count as part of your down payment or equity contribution.

---

📊 Example

Let’s say you’re building a $500,000 home (land + build).
With a 15% down payment, you’d need:

• $75,000 cash or equivalent value in land/equity
• The rest can be financed through your construction loan

We’ll help you calculate exactly what’s needed — before you commit to plans or a builder.

---

💡 How to Reduce Your Required Down Payment

✅ Choose a one-time close loan to save on closing costs
✅ Consider FHA or VA options if eligible
✅ Use land equity to reduce cash needed
✅ Apply gift funds from an allowed donor
✅ Select a builder offering closing credits or cost incentives

Every dollar matters — and we’ll help you strategize smartly.

---

🧠 Don’t Forget: Reserve Requirements

In addition to your down payment, lenders often require:

• 3–6 months of reserves (mortgage payments in savings)
• A contingency buffer in your build budget (usually 5–10%)
• Funds for permits, soft costs, and upgrades not included in the base bid

We’ll walk through the full budget and make sure you’re not caught off guard.

---

🏢 Why PRMI?

At PRMI, we help:

• Clarify total project costs and down payment expectations
• Approve you for both land and build financing
• Work with custom or production builders
• Offer multiple options — FHA, Conventional, Jumbo, and more

We build your financing plan around your home, your timeline, and your goals.

---

👇 Want to Know What Down Payment You’ll Need for Your Home Build?

Let’s map out your project and show you exactly what to expect — before you break ground.