48 Meriden Rd, Suite 1, Middlefield, CT 06455

FHA Construction Loan Mortgages in Connecticut

FHA Construction Loan


If you’re looking to build a home from the ground up, an FHA Construction Loan might be right for you. The Federal Housing Administration (FHA), a division the US Department of Housing and Urban Development (HUD), created the FHA loan program to make getting a mortgage easier for consumers. Included in that program, is the FHA Construction loan for those borrowers looking to build a new home.


How Does an FHA Construction Loan Work?



First of all, a borrower must make sure they are eligible for an FHA loan. They must meet the FHA guidelines for income, credit, and assets. The good news is that FHA guidelines are not as strict at conventional loans and borrowers may qualify with lower credit scores.


Builder Approval:

With an FHA construction loan, your builder must also be approved by FHA. They will need go to through an approval process and submit references, two year’s tax returns, licenses, and more.


Project Approval:

Once the borrower and builder has been approved, a site must be selected, and construction/purchase agreement detailed between the seller and builder. The lender will review the agreement and structure the loan accordingly. FHA does not allow the borrower to be involved in the construction in any way. Furthermore, the builder must be responsible for all construction and improvements in the agreement; the borrower cannot act as the builder.


Loan Structure:

Most noteworthy, FHA Construction loans have limitations on how high the loan can be in each county in each state. Fairfield County has higher loans limits than most counties in Connecticut – as high as $601,450 for a single-family home.  Furthermore, borrowers do not make payments until the home is completed.  Once the home is finally completed, then the loan becomes a traditional FHA mortgage.


Don’t let low home inventory stop you from getting the home of your dreams! Contact me today to find out about building the home you deserve.


Kristina L. Refsbeck


Company NMLS#117273

Cell: 203-293-8377



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