What does a typical timeline look like on a construction loan?

Everyone’s timeline will be different. Putting the appraisal aside, it generally will take a week or two to get the loan approved. The approval of the loan will work concurrently with the appraisal process.

The single biggest item that impacts how long it takes to close on your construction loan is when adequate plans and a budget are available. Because the construction loan appraisal is based on the plans and specs of the project, the appraiser cannot begin until those are available. You want to give yourself 30 days from when the plans and budget are available to order the appraisal before you close your loan.

The things that will have the biggest impact on how long it takes to close your construction are:

  • How long will it take to get all of the supporting items we need from you

  • How long before the plans and budget are done so we can order the appraisal

  • How long will we sit in underwriting queue for approval

  • How long will the appraisal take

  • Will we have a tough time document ting something the underwriter needs

  • Will we have any appraisal delays or issues

  • The dreaded “unexpected”

Issues above aside, if everything goes as planned and we are able to order the appraisal right away or early in the process, the typical start to close time frame can be 30-60 days. If we are able to get all we need from the client right away and order the appraisal we’ll be closer to the 30 day time frame. If it takes a while to get items from the client and the appraisal can’t be ordered for a while, it will be closer to 60 days or longer. We’ve had a few clients that have taken a year to close due to delays in plans and changes in builders and budgets.

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