Construction Loan Down Payment Requirements

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Construction Loan Down Payment Requirements

Construction loan down payment requirements depend on more than a single percentage.

The amount you need may be affected by:

Loan program.
One-time or two-time closing.
Whether you already own the land.
Land value.
Existing land debt.
Construction cost.
As-completed appraised value.
Loan-to-cost ratio.
Loan-to-value ratio.
Credit profile.
Occupancy.
Property type.
Loan amount.
Builder and project.
Required contingency.
Closing costs.
Financial reserves.

A borrower purchasing land and building a home may need a traditional cash contribution.

A borrower who already owns a valuable lot may be able to use eligible land equity toward the required investment.

An eligible veteran or USDA borrower may have access to a low- or no-down-payment construction program, but those programs are not available through every lender and still require the project, builder, appraisal, and borrower to qualify.

The correct question is not simply:

“What percentage do I need to put down?”

It is:

“How will this lender calculate the required contribution for this land, project, completed value, and loan program?”

Why Construction Loan Down Payments Are Different

A standard purchase mortgage finances a completed property with an established sales price.

A construction loan finances:

Land.
Plans.
Materials.
Labor.
Builder profit.
Permits.
Inspections.
Site development.
Construction in progress.
A home that does not yet exist.

The lender must manage the risk that:

Construction costs increase.
The builder fails to complete the home.
The appraisal is lower than expected.
The borrower changes the project.
The market declines.
The work is delayed.
The budget becomes insufficient.
Permanent financing is unavailable.

That additional risk can affect the required borrower contribution.

There Is No Universal Construction Down Payment

Construction lenders do not all use the same minimum.

Requirements may range from low-down-payment government-backed options to larger contributions for:

Jumbo construction.
Luxury homes.
Unique properties.
Owner-builder projects.
Investment properties.
Second homes.
Projects with limited comparable sales.
Higher loan-to-cost ratios.
Borrowers with complex income.
Properties with substantial acreage.
Cost-plus construction contracts.

A lender advertising “10% down construction financing” may impose additional requirements involving:

Maximum loan amount.
Minimum credit score.
Primary-residence occupancy.
Experienced builder.
Fixed-price contract.
Required reserves.
Maximum debt-to-income ratio.
Completed appraisal.
Property type.
Construction timeline.

The advertised percentage is only the beginning of the analysis.

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Loan-to-Cost Explained

Loan-to-cost compares the construction loan with the eligible cost of the project.

A simplified calculation is:

Loan amount ÷ eligible project cost = loan-to-cost ratio

Suppose:

Land purchase: $200,000.
Eligible construction cost: $800,000.
Total eligible project cost: $1 million.
Proposed loan: $800,000.

The loan-to-cost ratio is:

$800,000 ÷ $1,000,000 = 80%

The borrower’s apparent contribution is $200,000 before considering:

Closing costs.
Contingency.
Reserves.
Ineligible project expenses.
Appraisal limitations.
Existing liens.

The lender determines which costs qualify for the loan-to-cost calculation.

Loan-to-Value Explained

Loan-to-value compares the loan amount with the property’s appraised value.

For construction financing, the lender usually focuses on the as-completed value.

A simplified calculation is:

Loan amount ÷ as-completed appraised value = loan-to-value ratio

Using the previous example:

Proposed loan: $800,000.
As-completed value: $1.1 million.

The LTV is approximately:

$800,000 ÷ $1,100,000 = 72.7%

The same loan has:

80% loan-to-cost.
Approximately 72.7% loan-to-value.

Construction lenders may limit both ratios.

The Lower Value Can Control the Loan

Suppose:

Land and construction cost: $1 million.
As-completed appraised value: $900,000.
Maximum permitted LTV: 80%.

An 80% LTV produces a maximum loan of:

$900,000 × 80% = $720,000

Even though 80% of project cost would be $800,000, the lower appraisal may reduce the maximum loan to $720,000.

The borrower may need:

Larger contribution.
Lower construction cost.
Reduced project scope.
Different loan program.
Better-supported appraisal.
Less expensive land.

This is why the final down payment should not be calculated before the appraisal is complete.

The Appraisal Does Not Simply Add Every Cost

The appraiser estimates the completed market value.

The calculation is not:

Land cost + construction cost + closing costs = appraised value

Some project costs may not add equal value, including:

Architectural fees.
Loan fees.
Demolition.
Utility extensions.
Difficult excavation.
Retaining walls.
Contractor overhead.
Construction interest.
Premium custom finishes.
Highly personalized improvements.
Excessive site-development costs.
Landscaping.
Temporary housing.

A project can cost $1.5 million while appraising for less.

Purchasing the Lot and Building With One Loan

Some construction-to-permanent loans finance:

Land acquisition.
New home construction.
Approved soft costs.
Eligible site improvements.
Certain construction reserves.

Fannie Mae’s current single-close construction-to-permanent guidance treats a purchase as a transaction where the borrower does not own the lot when interim construction financing first advances. Its LTV calculation generally uses the loan amount divided by the lesser of the total purchase price—land plus construction—or the as-completed appraised value. Fannie Mae Selling Guide

That framework demonstrates why both cost and value matter.

Individual lenders can impose additional requirements.

Building on Land You Already Own

If you already own the lot, eligible equity may contribute toward the required investment.

The lender may evaluate:

Current land value.
Original acquisition cost.
Date purchased.
Existing land loan.
Title.
Liens.
How the land was acquired.
As-completed value.
Program requirements.

Fannie Mae’s current single-close guidance treats an eligible transaction differently when the borrower owns the lot before the first construction advance. Such a transaction may be structured as a limited cash-out refinance, with the LTV generally calculated using the as-completed value under the applicable requirements. Fannie Mae Selling Guide

See Building a Home on Land You Already Own for a complete discussion.

Example of Using Land Equity

Assume:

Current land value: $250,000.
Existing land loan: $50,000.
Net apparent land equity: $200,000.
Construction cost: $800,000.
As-completed value: $1.1 million.
Proposed loan: $850,000.

The new loan may need to:

Pay off the $50,000 land loan.
Finance eligible construction costs.
Cover approved project expenses.

The lender will determine whether the $200,000 in apparent land equity satisfies the required contribution after applying:

LTV limits.
Loan-to-cost limits.
Existing payoff.
Closing costs.
Contingency.
Program rules.

The owner should not assume the entire land equity amount functions exactly like cash.

Land Owned Free and Clear

Owning land without debt can create a strong equity position.

But free-and-clear ownership does not always eliminate the need for liquid funds.

Cash may still be required for:

Closing costs.
Prepaid expenses.
Construction interest.
Contingency.
Cost overruns.
Change orders.
Builder deposits.
Temporary housing.
Furnishings.
Landscaping.
Required reserves.
Expenses excluded from financing.

Land equity cannot pay a contractor invoice unless the approved loan releases the necessary funds.

Recently Purchased Land

A lender may treat recently acquired land differently from land owned for several years.

The lender may consider:

Purchase price.
Current appraisal.
Date acquired.
Whether the value increased.
Whether improvements were completed.
Relationship between buyer and seller.
Whether the transfer involved a gift.
Existing financing.

A borrower who bought land for $100,000 last month should not automatically assume a new $200,000 appraisal creates $100,000 of immediately usable construction equity under every program.

The actual calculation is lender-specific.

Inherited or Gifted Land

Land received through inheritance or gift may potentially contribute equity.

Documentation may include:

Deed.
Probate documents.
Will.
Trust documents.
Affidavit of heirship.
Gift documentation.
Evidence of relationship.
Current appraisal.
Title commitment.

The lender must confirm:

Legal ownership.
No undisclosed repayment obligation.
Existing liens.
Other owners.
Access.
Restrictions.
Eligible land value.

A family transfer can appear simple while creating title issues that must be resolved before the construction loan closes.

Land With Multiple Owners

If the property is owned with:

Parent.
Sibling.
Business partner.
Trust.
Former spouse.
Another family member.

the lender must determine:

Who will be a borrower.
Who will sign the security instrument.
Whether ownership will change.
Whether equity belongs fully to the borrower.
Whether another owner expects compensation.
Whether a gift is involved.

The complete land value may not count as the borrower’s contribution when ownership is divided.

Land Owned by a Business

A lot held in an LLC, corporation, or partnership may need additional review.

The construction lender may require:

Transfer into the borrower’s individual name.
Entity documentation.
Ownership verification.
Authorization to pledge the property.
Personal guarantees.
Different portfolio financing.
Title-company approval.

Transferring land immediately before closing may also create:

Tax considerations.
Title seasoning questions.
Documentation needs.
Community-property considerations.

Do not transfer ownership until the lender, title company, attorney, and tax professional have reviewed the proposed structure.

Existing Land Loan

When the land has a loan, the new construction financing may pay it off.

The payoff reduces net land equity.

For example:

Land value: $300,000.
Existing land loan: $175,000.
Net apparent equity: $125,000.

The new lender may also need to account for:

Accrued interest.
Payoff fees.
Other liens.
Taxes.
Closing costs.

A borrower should calculate equity using the actual payoff—not the original loan amount or estimated principal balance.

Down Payment Versus Cash to Close

The required down payment is not always the same as the total cash needed at closing.

Cash to close may include:

Required borrower contribution.
Closing costs.
Prepaid interest.
Insurance.
Initial escrow deposits.
Title costs.
Recording fees.
Discount points.
Builder deposits.
Funds needed to balance the project budget.
Additional reserves deposited into the construction account.

A borrower may satisfy the equity requirement through land value but still need significant cash for closing and reserves.

Construction Contingency

The lender may require contingency funds to address unexpected costs.

A contingency may be calculated as a percentage of:

Hard construction costs.
Total construction costs.
Eligible project budget.

Contingency may help cover:

Unforeseen site conditions.
Material price changes.
Required engineering.
Utility work.
Permit changes.
Necessary change orders.

Depending on the program, contingency may be:

Included within the loan.
Funded by the borrower.
Held in a controlled account.
Limited to approved uses.

A contingency is not necessarily part of the down payment, but it can increase the borrower’s total required funds.

Required Reserves

Financial reserves are assets remaining after closing.

The lender may require reserves based on:

Loan amount.
Monthly payment.
Construction term.
Other housing obligations.
Number of financed properties.
Income type.
Credit profile.
Jumbo status.
Property type.
Loan program.

Reserve requirements are separate from:

Down payment.
Closing costs.
Construction contingency.
Interest reserve.

A borrower can have enough land equity to satisfy the down payment and still be declined for insufficient liquid reserves.

Review Mortgage Reserve Requirements Explained.

Interest Reserves

An interest reserve may be established to make some or all construction-phase loan payments.

The reserve may be:

Included in the project budget.
Financed when permitted.
Funded by the borrower.
Calculated using the expected construction period.
Controlled by the lender.

If construction takes longer than expected, the reserve may be exhausted.

The borrower may then need to make payments directly and possibly pay extension costs.

Closing Costs

Construction loans can include costs beyond a standard mortgage.

Possible charges include:

Construction administration.
Draw inspections.
Title updates.
Appraisal.
Final inspection.
Survey.
Builder review.
Legal documentation.
Rate-lock extension.
Loan modification.
Recording.
Construction escrow.
Other third-party services.

Some costs may be financeable.

Others may require cash.

Ask for a complete project estimate—not merely the loan’s down payment percentage.

Conventional Construction Loan Requirements

Conventional construction-to-permanent programs may allow relatively low down payments for strong owner-occupied scenarios, but actual availability depends heavily on the lender.

Requirements may include:

Acceptable credit.
Primary-residence occupancy.
Approved builder.
Fixed-price contract.
As-completed appraisal.
Maximum loan amount.
Debt-to-income limits.
Required reserves.
Construction deadline.
Eligible property.

Construction lenders may impose overlays beyond standard conforming requirements.

FHA Construction-to-Permanent Financing

FHA construction-to-permanent financing may provide a lower-down-payment path for eligible primary-residence borrowers.

The program generally requires compliance involving:

Minimum required investment.
FHA mortgage insurance.
FHA appraisal and property standards.
Approved builder and contractor documentation.
Construction budget.
Inspections.
Closing structure.
Completion requirements.
Lender overlays.

HUD’s construction-to-permanent guidance permits FHA financing to combine interim construction financing and the permanent mortgage under applicable requirements. U.S. Department of Housing and Urban Development

Not every FHA lender offers construction financing.

See FHA Mortgage Insurance Explained before comparing only the initial down payment.

VA Construction Financing

Eligible veterans may potentially obtain construction financing with little or no down payment when:

Entitlement is sufficient.
The borrower qualifies.
The property appraises.
The builder is acceptable.
The project meets VA and lender requirements.
The lender offers the program.

Practical availability can be limited.

Some lenders offering regular VA purchase loans do not offer VA construction loans.

Others may impose:

Credit overlays.
Builder requirements.
Reserve requirements.
Loan-size limits.
Construction restrictions.
Additional documentation.

A no-down-payment structure does not mean the veteran will need no funds.

Cash may still be required for:

Expenses not financed.
Upgrades.
Change orders.
Reserves.
Temporary housing.
Costs exceeding appraised value.
Items prohibited by the program.

USDA Single-Close Construction Financing

USDA’s guaranteed single-close construction program can provide a no-down-payment option for eligible borrowers and properties.

Eligibility depends on:

Household income limits.
USDA-eligible location.
Credit.
Repayment ability.
Primary-residence occupancy.
Eligible builder.
Fixed-price contract.
Approved construction and site.
Lender participation.

USDA’s January 2026 construction training materials describe the guaranteed single-close program as a no-down-payment option and identify eligible costs that can include land acquisition or payoff, construction hard and soft costs, and certain reserves, subject to completed value and program requirements. USDA Rural Development

Program eligibility does not guarantee local lender availability.

Jumbo Construction Loans

Jumbo construction loans commonly involve:

Larger loan amounts.
Stronger reserve requirements.
Lower maximum leverage.
More extensive income review.
Higher credit expectations.
Two appraisals or appraisal reviews in some cases.
Larger contingency.
More experienced builders.
Detailed budget oversight.

A borrower with substantial assets may still need a significant contribution when:

The property is unique.
Comparable sales are limited.
Construction cost exceeds supported value.
The project is located on extensive acreage.
Income is variable.
Loan amount is unusually large.

Review Preparing Early for a Jumbo Mortgage.

Investment Property Construction Loans

Investment-property construction financing may require a larger contribution than owner-occupied financing.

The lender may consider:

Experience.
Exit strategy.
Project profitability.
Expected rent.
Completed value.
Existing portfolio.
Liquidity.
Number of financed properties.
Construction risk.
Builder relationship.

Financing may be structured through:

Bank portfolio loan.
Commercial loan.
Investor construction lender.
Private financing.
DSCR permanent loan after completion.

Do not assume owner-occupied construction terms apply to an investment project.

Second-Home Construction Loans

Second-home construction may involve:

Higher down payment.
Additional reserves.
Occupancy review.
Existing primary-home payment.
Higher total debt.
Jumbo financing.
Property-use restrictions.

The lender must confirm that the property qualifies as a legitimate second home rather than an investment property.

Related resource: Second Home Mortgage Requirements.

Acreage and Rural Construction

Construction on acreage may require a larger contribution or specialized lender when:

Land value is difficult to support.
Most acreage is agricultural.
Comparable sales are limited.
Access is private.
Utilities are distant.
Improvements include large barns or commercial features.
The property is unique.
The land overwhelms the residential use.

The lender may not give equal value to every acre.

See Buying a Home With Acreage in Texas.

Unique Property Construction

A project may require additional equity when it involves:

Barndominium.
Unusual architecture.
Very large square footage.
Luxury finishes.
Mixed-use design.
Multiple residences.
Extensive outbuildings.
Remote location.
Unusual construction materials.
Limited comparable sales.

The issue is not necessarily construction quality.

The lender is concerned about marketability and appraisal support.

Related resource: Unique Property Mortgage Financing.

Owner-Builder Financing

Owner-builder programs are limited.

A lender permitting the borrower to serve as general contractor may require:

Documented construction experience.
Higher down payment.
Larger contingency.
Stronger reserves.
Detailed budget.
Additional inspections.
Independent construction management.
No borrower profit.
Licensing where required.

Many construction programs prohibit owner-builder transactions entirely.

Do not purchase land based on the assumption that personal labor will satisfy the down payment.

Can Sweat Equity Count?

Some specialized programs may recognize limited eligible borrower labor or sweat equity.

Many traditional construction lenders do not count the borrower’s estimated labor value as an acceptable contribution.

Potential concerns include:

No independent invoice.
Uncertain completion.
Licensing.
Quality.
Insurance.
Budget verification.
Conflict of interest.
Inability to convert labor into cash for overruns.

Verify the program before including sweat equity in the financial plan.

Builder Deposits

A builder may require an upfront deposit.

The lender must determine:

Whether the deposit is permitted.
Whether it can count toward the required contribution.
Whether it is included in the budget.
What documentation is required.
Whether reimbursement is possible.
Whether the payment occurred before builder approval.
Whether it creates lien concerns.

Documentation may include:

Construction contract.
Invoice.
Canceled check.
Bank statement.
Wire confirmation.
Builder receipt.

Do not pay a large deposit before confirming how it will be treated.

Previously Paid Project Costs

The borrower may already have paid for:

Architectural plans.
Engineering.
Survey.
Soil testing.
Permits.
Site work.
Builder deposit.
Utility planning.
Demolition.

Some documented eligible costs may receive credit toward the borrower’s contribution.

Others may not.

The lender will consider:

When the cost was paid.
Source of funds.
Whether it is part of the approved project.
Whether the work is complete.
Whether the cost is supported.
Whether a lien exists.
Program rules.

Preserve invoices and proof of payment.

Gift Funds

Some construction programs may permit eligible gift funds for part or all of the required borrower contribution.

The lender may require:

Gift letter.
Donor documentation.
Evidence of transfer.
Proof of relationship.
Confirmation that repayment is not expected.

Fannie Mae’s current single-close guidance allows certain gifts, grants, or employer assistance to satisfy applicable minimum contribution requirements for eligible one-unit principal-residence transactions. Fannie Mae Selling Guide

Jumbo and portfolio programs may be more restrictive.

Business Funds

Business owners may use eligible business funds when permitted.

The lender may need to verify:

Ownership.
Access.
Account balance.
Source.
Business liquidity.
Effect of withdrawal.
Continued ability to operate.
Relationship between the funds and qualifying income.

A large withdrawal can satisfy the down payment while weakening the business that generates the borrower’s income.

See Using Business Funds for a Home Purchase.

Investment and Retirement Assets

Eligible funds may come from:

Checking.
Savings.
Brokerage accounts.
Vested company stock.
Retirement accounts.
Trust accounts.
Sale proceeds.
Other acceptable assets.

The lender may discount or reduce balances for:

Taxes.
Penalties.
Margin debt.
Existing loans.
Market volatility.
Restricted access.
Funds used for reserves.

Review Using Multiple Asset Accounts for Mortgage Qualification.

Avoid Investing Every Available Dollar

A borrower may be able to reduce the loan amount by making a larger contribution.

However, construction introduces financial uncertainty.

Liquidity may be needed for:

Cost overruns.
Change orders.
Temporary housing.
Additional interest.
Rate-lock extension.
Landscaping.
Furnishings.
Moving.
Utility expenses.
Taxes.
Builder disputes.

A borrower should not begin a custom-home project with no cash remaining merely because the lender accepted the maximum possible contribution.

Example: Cash Down Payment

Assume:

Land and construction cost: $1.2 million.
As-completed value: $1.25 million.
Maximum lender loan: $1 million.

The borrower may need at least $200,000 toward project cost, plus any:

Closing costs.
Prepaid expenses.
Required reserves.
Unfinanced contingency.
Ineligible costs.

The true cash requirement may exceed $200,000.

Example: Land Equity Covers the Contribution

Assume:

Borrower owns land worth $300,000 free and clear.
Construction cost: $900,000.
As-completed value: $1.25 million.
Proposed loan: $900,000.

The lender may determine that eligible land equity satisfies the required project contribution.

The borrower may still need liquid funds for:

Closing costs.
Reserves.
Construction interest.
Unapproved changes.
Personal expenses.

“No additional down payment” does not necessarily mean “no cash needed.”

Example: Appraisal Creates a Larger Down Payment

Assume:

Land and project cost: $1.4 million.
Expected completed value: $1.5 million.
Actual completed appraisal: $1.25 million.
Maximum permitted LTV: 80%.

The maximum loan based on that simplified assumption would be:

$1.25 million × 80% = $1 million

The borrower may need approximately $400,000 toward the $1.4 million project before other costs.

The low appraisal can materially change the down payment.

Example: Cost Overrun After Closing

Assume:

Approved construction budget: $800,000.
Contingency: $80,000.
Unexpected site and foundation costs: $130,000.

The contingency covers $80,000.

The borrower may need to provide the remaining $50,000 from verified funds.

The original down payment does not cap the borrower’s potential construction exposure.

Down Payment Changes Caused by Change Orders

After closing, the borrower may add:

Pool.
Outdoor kitchen.
Larger garage.
Higher-end appliances.
Upgraded flooring.
Guest house.
Additional square footage.

The lender may require the borrower to fund changes that exceed:

Approved budget.
Available contingency.
Eligible loan amount.
Supported appraised value.

Optional upgrades should not be approved without understanding how they will be paid.

Documents to Prepare

The lender may request:

Land purchase contract.
Recorded deed.
Land-loan payoff.
Title commitment.
Survey.
Construction contract.
Plans and specifications.
Detailed budget.
Draw schedule.
Builder documents.
Appraisal.
Prior invoices.
Proof of paid project costs.
Bank statements.
Brokerage statements.
Retirement statements.
Business statements.
Gift documentation.
Reserve documentation.
Insurance.
Permit information.

Questions to Ask the Construction Lender

Ask:

What is the minimum down payment?
What maximum LTC applies?
What maximum LTV applies?
Is the loan based on cost, appraised value, or the lower amount?
How will land equity be calculated?
Does the land acquisition date matter?
Will the land loan be paid off?
Can previously paid costs count?
Can builder deposits count?
Can gift funds be used?
Can business funds be used?
What contingency is required?
Must contingency be borrower-funded?
What reserves are required?
Is an interest reserve included?
Which costs cannot be financed?
What happens if the appraisal is low?
What happens if construction costs increase?
What happens to unused funds?
Can the loan amount be modified?

Common Misconceptions

“Construction Loans Always Require 20% Down”

Some programs require less, while others require more.

The answer depends on program, cost, value, property, borrower, and lender.

“Owning the Land Means I Need No Money”

Land equity may satisfy the project contribution, but liquid funds may still be needed for closing, reserves, contingency, and overruns.

“The Lender Uses the Project Cost as the Value”

The lender generally relies on an as-completed appraisal and applicable cost-versus-value calculation.

“A No-Down-Payment Program Means No Cash Is Needed”

The borrower may still need funds for excluded expenses, upgrades, reserves, delays, or costs exceeding value.

“The Construction Loan Will Increase if Costs Rise”

Cost overruns do not automatically increase the approved loan.

“Every Dollar I Paid Before Closing Counts as Down Payment”

Previously paid costs must be eligible, verified, and recognized by the program.

“All of My Land Value Counts as Equity”

Existing liens, ownership, acquisition history, appraisal, and program rules can reduce the usable amount.

Real Lender Perspective

Construction loan down payment requirements should be calculated only after we understand the complete project.

We need to identify:

Who owns the land?
What is it worth?
What debt is attached?
What will construction actually cost?
What costs are eligible?
What is the as-completed value?
What maximum LTC and LTV apply?
What contingency is required?
How much liquidity must remain?
Which loan programs fit the borrower?

The down payment is not merely a percentage of the builder’s contract.

It is the amount needed to balance the approved loan against the eligible project cost and supported completed value.

Sometimes land equity satisfies the complete contribution.

Sometimes a low appraisal creates a larger cash requirement.

Sometimes a government-backed program reduces the down payment.

Sometimes a unique jumbo project requires materially more equity.

The calculation must be completed before the borrower commits to the land, builder, or design.

Who This Guide Is For

This guide may be especially helpful for:

Texas custom-home buyers.
Borrowers purchasing land and building.
Borrowers building on owned land.
First-time custom-home builders.
FHA construction borrowers.
VA-eligible borrowers.
USDA-eligible borrowers.
Jumbo construction borrowers.
Physicians and executives.
Business owners.
Buyers building on acreage.
Investors constructing rental property.
Borrowers considering an owner-builder project.
Families planning a tear-down and rebuild.

Final Thoughts

Construction loan down payment requirements are determined by the relationship among:

Land.
Existing liens.
Construction cost.
Eligible project expenses.
As-completed appraised value.
Maximum loan-to-cost.
Maximum loan-to-value.
Loan program.
Borrower profile.

Do not plan the project around a generic assumption that construction requires 10%, 20%, or 25% down.

Instead:

Confirm the loan program.
Establish land ownership and equity.
Obtain a detailed construction budget.
Identify every eligible and ineligible cost.
Complete the appraisal.
Calculate contingency and reserves.
Preserve liquidity for unexpected expenses.
Determine the actual cash to close.

The strongest construction plan does not merely satisfy the lender’s minimum contribution.

It leaves enough financial flexibility to carry the project through completion without every unexpected cost becoming a crisis.