New Construction loan snapshot for California
| Item | Estimate |
|---|---|
| Minimum down payment | 0%–20% (by loan program) |
| Minimum credit score | 580–680 (by loan program) |
| Typical CA home value | $695,400 |
| 3.5% down on typical home | $24,339 |
| 20% down on typical home | $139,080 |
| Avg. effective property tax | 0.71%/yr (~$410/mo) |
| Income for typical home (31% rule) | $214,000 |
Rate assumption: 7.18% (Freddie Mac PMMS 30-year fixed average, week of November 5, 2026). Change it in the payment calculator.
Which California programs pair with New Construction loans?
- MyHome Assistance: A deferred-payment junior loan that can cover part of the down payment or closing costs for first-time buyers.
- Dream For All Shared Appreciation: When funded, provides a large down payment loan repaid with a share of future appreciation; rounds open periodically.
- CalPLUS: A first mortgage with a slightly higher rate paired with closing cost assistance.
Details and current limits: California Housing Finance Agency (CalHFA).
Buying a new home from a builder vs. building your own: what's the difference?
Most buyers of new homes buy from a production or spec builder: the builder owns the land, builds the house and sells it to you. You finance it with a normal purchase mortgage that closes when the home is complete and has a certificate of occupancy. If the home isn't finished yet, the builder's contract usually sets a deposit and an estimated completion date, and your rate lock has to cover the wait.
Building your own (a custom home on land you own or are buying) works differently. Because there's no finished house to secure a regular mortgage, lenders use a construction loan that pays the builder in stages (draws) as work is inspected, then either converts to a permanent mortgage or is paid off by one.
Construction-to-permanent (one-time close) vs. two-time close
One-time close reduces paperwork and protects you if rates or your finances change during the build. Two-time close can offer more lender choice and lets you shop the permanent mortgage after the home is done.
| Feature | One-time close | Two-time close |
|---|---|---|
| Closings | One — construction and mortgage together | Two — construction loan, then a separate mortgage |
| Closing costs | One set | Two sets |
| Rate | Permanent rate usually set at the first closing | Mortgage rate set when you close the second loan |
| Re-qualifying | No second approval | You must qualify again after the build |
| Programs | FHA, VA, USDA and conventional (Fannie Mae/Freddie Mac) versions exist; fewer lenders offer them | Widely available; construction loan is often interest-only |
New Construction loans in California cities
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Get My MatchesFigures on this page are estimates for educational purposes only and are not a loan offer or commitment to lend. Rates, loan limits, fees and assistance programs change frequently and vary by lender, location and borrower profile. Confirm current terms with a licensed loan officer.