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Call (916) 436-3776Building a Home California
How Do I Finance Building a Home from the Ground Up in California in 2026?
Building a home is financed with a construction loan, which works differently from a mortgage: the lender releases money in stages (draws) as the build hits milestones, and you pay interest only on what's drawn. The key choice is structure, a single-close construction-to-permanent loan closes once and converts to a regular mortgage at completion (saving on closing costs), while a stand-alone construction loan must be refinanced afterward. Expect 20 to 25% down, a 680+ credit score, detailed plans, and a lender-approved builder, with rates about 1 to 2 points above conventional (roughly 7 to 9% during the build). Owner-builder loans exist but are harder to find. Ashlar Lending structures the loan; Serve First underwrites the lot; Ashlar LDA prepares the entity.
Building a home from the ground up is really a financing project with a house at the end of it, and the loan works nothing like a normal mortgage. Instead of borrowing a lump sum against a home that already exists, you borrow against a home that doesn't exist yet, and the lender releases the money in stages (called draws) as the build hits milestones, charging interest only on what's been drawn so far. The big decision is the loan structure: a single-close construction-to-permanent loan closes once and converts automatically to a regular mortgage when the house is finished, while a stand-alone construction loan has to be refinanced into a permanent mortgage after completion. Construction loans ask more of you than a purchase mortgage, typically 20 to 25% down, strong credit, detailed plans and budget, and a lender-approved builder, and they run a point or two above conventional rates because the lender is taking on more risk. This guide covers how construction loans are structured, drawn, and qualified for, then links to a guide for your area. Ashlar Lending structures the financing and manages the draws; Serve First helps you find and underwrite the lot; Ashlar LDA prepares the entity. If you’re still buying the lot, start with our land guide; for a smaller-scale build, see building an ADU.
One family. Land, financing, and entity.
Build from the ground up, with the construction financing lined up first
Building a home is really a financing project with a house at the end of it, so the loan structure and the lot have to be right before the first shovel. The Ashlar Brands family works the whole build:
- Ashlar Lending Inc. (NMLS #2699657) structures the construction financing: single-close construction-to-permanent loans, stand-alone construction loans, and owner-builder options where you qualify, and manages the draw schedule that funds the build in stages.
- Serve First Realty helps you find and underwrite the lot, checks that the site and budget support the finished-home value, and represents you whether you’re building to live in or to sell.
- Ashlar LDA, Inc., a bonded and registered Legal Document Assistant, can prepare the LLC or entity paperwork and deeds at your direction.
These are separate businesses in the Ashlar Brands family. Serve First is a real estate brokerage, not a lender or law firm; loan terms, rates, draw schedules, and owner-builder eligibility are set by the lender. A Legal Document Assistant prepares documents at your direction and is not a substitute for an attorney. This is general information, not tax advice.
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