Construction Loans in 2025: Turning Blueprints Into Reality
- David Marsh
- Jun 13
- 2 min read
So, you’ve got a vision. Maybe it’s a mid-century modern masterpiece on the edge of Joshua Tree. Or a sleek fourplex in downtown Phoenix. Or heck, just a tiny house with a killer deck. Whatever the dream, construction loans are how you turn dirt and drawings into something you can live in — or rent out.
At Grand Funding, we specialize in helping buyers, builders, and dreamers turn concepts into concrete. Literally.
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What’s a Construction Loan (and Why Not Just Use a Regular Mortgage)?
Great question. A construction loan is a short-term, high-touch loan used to finance the building of a home or property. It’s different from a traditional mortgage because you don’t have a house yet — just land, plans, and potential. These loans are typically:
• Short-term (6 to 24 months)
• Interest-only during construction
• Disbursed in stages (aka “draws”) based on milestones like framing or roofing
Once the build is complete, you can either refinance into a traditional mortgage (construction-to-perm) or sell/refi into an investor loan.
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Why Build in 2025?
• Low housing inventory means building might be your best way to get what you want
• New zoning laws in AZ and CA are unlocking lots for ADUs and multifamily infill
• Eco-efficient materials and smart home tech are easier to integrate in new builds
• Construction costs have stabilized after years of volatility (finally!)
If you’ve been priced out of your ideal neighborhood, it might be time to build in your next ideal neighborhood. We’ll help you make the math work.
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What You’ll Need to Qualify
Don’t worry — you don’t need to be Bob the Builder. But you do need:
• Detailed architectural plans
• A licensed contractor or builder
• Project budget (we help you fine-tune this)
• 20–25% down (some lenders go lower with strong financials)
• Decent credit (usually 680+)
• An appraisal based on the “as-completed” value
Bonus: If you already own the land, you can use that as your down payment.
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Construction-to-Perm Loans: Your Best Friend in 2025
Instead of financing construction and then applying for a new mortgage after, why not wrap it all into one? Construction-to-permanent (C2P) loans do just that. One closing, one set of documents, less stress.
We offer C2P options through private lenders and banks that understand Arizona and California permitting timelines, building code delays, and local contractor realities (aka they’ve waited 6 weeks for an inspector before).
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Pro Tip: Budget 10–15% for unexpected costs — because something will go wrong. We just make sure your financing doesn’t.
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