Mortgage Myth #1 — You Need 10–20% Down to Build a Home
Michael Creed • July 1, 2025
Fact: You can build with as little as 0% Down
Let’s kick off our Mortgage Myths series with a big one: New construction means big down payments. Right?
Not anymore.
The Myth: “You need 10–20% down to build a new home.”
Why It’s Wrong: That belief comes from outdated lending requirements or inflexible bank construction loans. But we’ve got One-Time Close options that make building surprisingly affordable.
The Truth:
Conventional New Construction
- 700 Minimum Credit Score
- 5% Down Payment
- Primary and Second Homes
FHA New Construction
- 620 Minimum Credit Score
- 3.5% Down Payment
- Primary Residences Only
VA - Veterans Administration Home Loans - New Construction
- 620 Minimum Credit Score
- No Down Payment
- Primary Residences Only
These programs roll the lot, construction, and permanent financing into one loan — often with just one set of paperwork and one closing, but with the benefit of a rate float down once the home is completed and move-in ready.
Who This Helps
- First-time builders
- Veterans
- Rural homeowners
- Buyers priced out of existing inventory
- Anyone frustrated by resale options
Take Action
Know someone looking to build but discouraged by down payment fears?
→ Book a consult with me, or for more availability, book a consult with my team's Pre-Approval Expert.
→ Refer a client by group texting them and my team (our number is 262-696-9048)
→ Download our free New Construction and Renovation Lending Guide
→ Forward this blog post
Make sure you treat this like the largest transaction of your life!
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