Explore flexible financing options designed to make your ADU project achievable. Learn how Mode Homes helps homeowners secure funding and plan their investment with confidence.
At Mode Homes, our top priority is helping you navigate the process of securing financing for your custom home or ADU. We work with trusted lenders and financial partners to provide solutions that make building your dream home simple and accessible.
Our streamlined process has helped numerous homeowners and investors obtain construction loans, ensuring they can fund their Mode Homes project with confidence. We focus on affordability, transparency, and flexibility, allowing you to build a high-quality, custom home that fits your budget and lifestyle.
Yes — and this is one of the biggest advantages of owning your lot outright before you build. Most construction lenders will apply your land equity toward the required down payment, which typically ranges from 20–25% of the total project cost (land + construction). If your lot is paid off or has substantial equity, you may be able to start your build with little to no additional cash out of pocket. We work with lenders who are experienced with build-on-your-lot projects across the Boise metro and Southern Idaho and can connect you with the right financing partner for your situation.
A construction loan is a short-term loan — typically 12 to 18 months — that funds the building process. Unlike a traditional mortgage, funds are not disbursed all at once. Instead, your lender releases draws at key milestones as construction progresses (foundation, framing, rough-ins, drywall, completion). You generally pay interest only on the funds drawn during the build. Once the home is complete, the construction loan either converts to a permanent mortgage (called a construction-to-permanent or “one-time close” loan) or is paid off with a new mortgage you take out at certificate of occupancy.
A one-time close loan combines your construction financing and your permanent mortgage into a single loan with a single closing. You lock your interest rate upfront, go through underwriting once, and pay one set of closing costs. When construction is complete, the loan automatically converts to your long-term mortgage. This is typically the most cost-effective and lowest-stress path for owner-occupants building a custom home on their own lot. We can connect you with Idaho lenders who specialize in one-time close products.
Most lenders look at your combined loan-to-value (CLTV) — meaning the total loan amount relative to the projected appraised value of the completed home. As a general rule, lenders want to see 20–25% equity in the deal, which can come from your land value, cash, or a combination of both. If your lot is worth $150,000 and your total project cost (land + build) is $500,000, your land equity alone may satisfy or significantly reduce the cash contribution required. Every lender calculates this differently, which is why working with one experienced in build-on-your-lot projects matters.
Ideally, both happen in parallel. Lenders need a signed builder contract and detailed construction budget to underwrite a construction loan, so you can’t finalize financing without a builder. But builders need to know you’re financeable before investing significant time in design and estimating. We help bridge this gap — once we assess your lot and project scope, we can provide a preliminary budget and letter of intent that many lenders will accept to begin pre-approval, so both tracks move forward simultaneously.
From application to closing, most construction loans take 30–60 days, assuming your builder contract, plans, and appraisal are ready. The appraisal — which values your home based on the completed plans — is often the longest step. Having a builder with detailed, lender-ready specs and a track record of completed projects (like ours) speeds this process considerably. We’ve been through this process many times with Idaho lenders and know exactly what documentation is needed to avoid delays.
Lenders evaluate several factors: your credit score (typically 680+ minimum, 720+ preferred), debt-to-income ratio, the appraised value of the completed home, your builder’s credentials and financial standing, and the detailed construction budget. Your lot’s location, zoning, and access to utilities also factor into the appraisal. One important note — lenders want to see a licensed, insured general contractor with a solid project history. We provide lenders with our full credentials, completed project portfolio, and references as part of the financing package.
Yes. We maintain relationships with local and regional lenders — including community banks, credit unions, and mortgage companies — who are active in build-on-your-lot construction lending across the Treasure Valley and Southern Idaho. We can introduce you to lenders who understand infill projects, ADUs, and custom homes in Idaho’s specific markets. We don’t charge for this — it’s part of how we make the process easier for our clients.
That’s common and usually workable. Your existing lot loan will be paid off as part of the construction loan closing, with the remaining balance rolled into the new construction financing. The key is that there needs to be enough equity and projected completed value to support the full loan amount. We’ll help you run the numbers upfront so you know where you stand before you approach a lender.
Most construction lenders in Idaho want a minimum credit score of 680, though 720 or above will get you better rates and more lender options. If your credit needs work before you’re ready to build, we’re happy to have an honest conversation about your timeline and what steps might help you qualify sooner. We’d rather help you get there right than rush into a project you’re not ready for.
We partner with trusted lending professionals who support real estate investors with flexible financing solutions and a smooth approval process.
10900 NE 8th St #800, Bellevue, WA 98004
P: (425) 635-4700
Service: Investor Construction Loans
1019 39th Ave SE Suite 220, Puyallup, WA 98374
P: (888) 540-9009
Service: Investor Construction Loans
