New Construction & Vacant Land Loans

Royal Credit Union provides flexible lending options for building and buying land. Royal offers construction loans for building your dream home or building a second home. You can include the cost of a land purchase if you do not already own the property where you are building. Land loans for vacant lots or recreational land are also available. Whether you're starting from scratch or already have a lot, Royal's home loan experts can help.

Royal's construction loan allows a building period of up to 9 months. During the construction period, borrowers pay only the interest on their construction loan. When construction is complete, the loan converts to a conventional fixed-rate or adjustable-rate mortgage. This means you only manage one loan from the building phase through permanent financing, simplifying the entire process.

Royal offers flexible rate lock options depending on your mortgage type. If you choose a 10/6 adjustable rate mortgage (ARM), you can lock your permanent financing rate at the start of construction. If you choose a fixed-rate mortgage as your permanent financing, you can lock your rate after construction is complete. You will be able to lock at Royal's rates that are current at the time construction is complete.

Both! A one-time closing combines the construction loan and permanent mortgage into a single closing, which can save you from incurring a second set of closing costs. Your mortgage loan officer can help determine which option works best for your situation.

Yes, you can include the cost of a land purchase if you do not already own the property where you are building. This works well for most borrowers because they won't incur another set of closing costs to finance the land separately.

Royal offers financing to purchase empty lots for future construction as well as land for recreational purposes like hunting. However, agricultural land and other types of land used to provide income are not eligible for land loans. Financing options for land loans include 3-year and 5-year adjustable-rate mortgages.

If you have enough equity in the project (meaning you've put enough money down), Royal Credit Union can potentially finance overruns. Other times, borrowers rely on a cushion of their own funds to pay for these added costs. It's a good idea to discuss potential cost increases with your mortgage loan officer before construction begins.