If you’ve dreamed of building a custom home on your own piece of land, understanding how to finance that journey is a critical first step. At a recent open house event hosted by Mountain Luxury Real Estate in Eden, Utah, Robin Jex from America First Credit Union shared her insights on lot loans, construction financing, and the difference between primary, secondary, and investment property loans.
Here’s a breakdown of what you need to know if you're thinking about purchasing land or building your dream home.
Lot Loans: 20% Down for Primary Residences
America First offers lot loans with a 20% down payment if the land will be used for a primary residence. This gives buyers the opportunity to secure the location for their future home while planning their build.
“I love helping people buy a lot where they can build their future home,” says Robin, a 22-year veteran at America First.
Construction Loans: Up to 95% Financing
For those ready to build, America First provides construction loans with up to 95% financing. The current construction loan rate is a fixed 6.24%, which transitions into a long-term mortgage once construction is complete.
Key highlights:
- Fixed-rate during construction: 6.24%
- Long-term mortgage rate (as of now): ~6.75% for primary residences
- Secondary home mortgage rate: ~7.875%
Primary vs. Secondary Homes: What’s the Difference?
If you’re not planning to live in the home full-time, it’s considered a second residence, which comes with different lending terms:
- Interest rates are roughly 1% higher than primary residences
- Must be 50–100 miles away from your current home
- Cannot be rented out short-term — that’s considered an investment property
Build Timelines: 9–12 Months with Flexibility
Construction loans come with build timeline expectations:
- Builder-led homes: 12 months to complete (with possible extensions)
- Self-build homes: 9 months to complete (also eligible for extensions)
“If it’s a self-build, normally we require you to have it built within nine months,” Robin explains, “but you can look at doing extensions if needed.”
Locking in Your Long-Term Rate
America First allows borrowers to lock in the long-term mortgage rate 60 days before the home is completed, giving flexibility and peace of mind in a changing interest rate environment.
Loan Requirements: Credit Score, Income, and Reserves
Getting approved for a construction loan requires meeting specific qualifications:
Standard Requirements:
- Credit score: Higher scores = better rates
- Income:
- W-2 employees: typical documentation
- Self-employed or commission-based: 2 full years of income history required
- W-2 employees: typical documentation
- Debt-to-Income (DTI) Ratios:
- Builder-led builds: up to 50% DTI
- Self-builds: up to 45% DTI
- Builder-led builds: up to 50% DTI
Additional Requirements for Self-Build Loans:
- Minimum credit score: 760
- 12 months of reserves: Must show savings equal to one year of future mortgage payments
“The self-build construction loan is a little stricter,” Robin says, “but very doable for those who qualify.”
Connect with a Loan Specialist
Interested in learning more? Call Robin Jex with America First Credit Union at 801-827-7349 for a personalized consultation.
Whether you’re buying land, building a second home, or designing your dream getaway, America First has lending products that support your vision — with great rates, flexibility, and local expertise.
Conclusion
Building your own home starts with the right financial partner. With options for lot loans, construction loans, and self-build support, America First Credit Union provides the tools and flexibility to make your dream a reality — whether it's a primary residence or a second home in the mountains.
