Build Your Home, Your Way

Construction Loans to Build Your Future

Turn your plans into progress with flexible financing from Independent Bank, designed to move with your build—from foundation to front door.

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How Do Construction Loans Work With Independent Bank?

Plan Your Build

Start by bringing your builder, budget, and vision.

Secure Your Loan

Get evaluated based on your future home value.

Build in Phases

Your funds are released as each stage is completed.

Move-In Ready

Transition into your long-term mortgage when your home is move-in ready.

Construction Loan Programs

Construction to Permanent Loan

Build your dream home with a single loan closing.

CHOICE Renovation® Mortgage

Potentially increase the value of your home & finance the updates.

Stand Alone 2^nd Mortgage Renovation

Use your home’s potential to fund your next remodel.

GreenCHOICE Renovation Mortgages®

Qualified borrowers may complete energy-efficient upgrades after closing.

Construction Loans FAQs

Answers to Common Questions About Construction Loans

What is a construction-to-permanent loan?

A Construction-to-Permanent loan is a single-close loan that includes a specific number of months of construction financing plus up to 30 years of end financing in one loan. For example, a 30 year Construction-to-Permanent loan with Independent Bank may include a 12-month construction period, as well as a 30-year principal and interest period. The Construction-to-Permanent loan has only one closing, one set of closing costs, and the loan terms remain the same throughout the life of the loan.

How do construction loans work in Michigan?

Once you have closed on your construction-to-permanent loan, funds will be released to your builder as progress is completed on your new home. During the construction phase, you will be responsible for interest-only payments. Once the home is complete, your loan will transition to full payments.

If I already own my lot, how do I determine how much I can borrow?

Generally, you will be able to borrow a percentage of the future value of the house, regardless of how long you’ve owned the lot or the total cost of the build. Lot equity can be used as a source of down payment as long as the appraised value is adequate.

Do I need to own land before applying for a construction loan?

No, you don’t need to own your land prior to the construction loan. In many cases, the cost of the lot can be included in your construction loan, helping you move from land purchase to completed home with one loan.

Are there monthly payments during construction?

During construction, there will be interest-only payments due based on the amount of funds that have been disbursed. This keeps payments more manageable while your home is being built.

How long does a construction loan last?

Independent Bank Construction-to-Permanent loans have a construction term of 12 months. The construction loan term begins at closing. If the home requires additional time, extensions can be requested.

Can I use a construction loan for a remodel or teardown?

Yes. Construction loans can often be used for major renovations, rebuilds, or teardown projects. Your loan amount will be based on the projected value of the home after improvements are complete.

Can I choose my own builder?

You can work with your preferred builder, as long as they meet lender requirements. This helps ensure your project stays on track and meets quality and timeline expectations.

What happens if construction costs go over budget?

Overruns can occur due to unforeseen circumstances or change orders for upgrades added by you as the project is built. All cost overruns and change orders that increase the overall cost of construction must be paid out of pocket by you before any additional draws will be released to your builder.