Financing Your New Modular Home

Not all Lenders Provide Financing for Modular Construction.


Construction-to-Permanent Loans are typically used to finance Modular Home Construction. The construction portion, until your home is complete and receives its final appraisal, is disbursed in progress payments. “Interest Only” payments are due during this phase. Once the home is complete, the loan will become a permanent mortgage. At that time, you’ll begin making regular payments against the total loan amount.

An Added Benefit of Financing a Modular

During the construction phase of your home, payments (or draws) are taken from the construction loan to pay contractors, subcontractors and materials, and the borrower (home owner) pays the monthly interest only payment on the amount drawn to date. Once construction is completed, the construction loan will be paid off with your permanent mortgage loan. One of the key advantages of modular construction is the shorter construction schedule. Construction of your home is occurring at the same time as the foundation work. When the foundation is completed, it is generally only a matter of weeks before your home is set. It is not uncommon for a modular home to be completed two to three months sooner than a comparable site built home, saving you the interest payments for those months. The amount you save here depends on the principal amount, the interest rate and the draw schedule. For illustrative purposes, the monthly interest payment on a $200,000 loan at 5% is $833.33. 

Recommended Area Lenders

We've worked with these lenders !

We know they have the products you are looking for, and the experience to guide you

successfully through the financing process.

Lindsay Tedisco

Loan Officer

1187 Troy Schenectady Road

Latham, NY 12110

(518) 730-9035

[email protected]

NMLS# 638045

Martha McQuigge

Mortgage Originator

171 South Broadway

Saratoga Springs, NY 12866

(518) 306-2704

 [email protected]

NMLS #525836

Be Prepared!  Here's How it Works.

Get a Prequalification Estimate from a local Lender - Determine how much money you’ll be able to spend on your new home. Compare RatesGet quotes from at least 3 different banks to see what kind of rates you can get. Even a difference of a hundredth of a percentage point difference in a rate can mean thousands of dollars over the life of the loan.

Apply for the Loan - The Lender will give you a list of information/documents to provide, including the building contract, a notarized copy of the deed for the land you’re building on if you own the land.  The lender will also need Blueprints of the home for appraisal. If your home’s estimated value doesn’t equal or exceed the risk the bank is taking with the loan, you will not be approved

Get approvedIf your application is satisfactory, the bank will approve the loan by sending you a Commitment Letter.  

Set Up a Disbursement ScheduleThe Lender will work with the Builder to establish a payment schedule.  As each milestone is reached, the bank will inspect for proof of completion then release payment.

Close on the Loan You and the bank will sign the final documents and you will pay closing costs.  The Bank will want to see the Building Permit.

Build Your Home - Make interest payments to the bank every month, until your home is complete,

Make Your Construction Loan a Permanent MortgageOnce construction has been completed, the bank will inspect and appraise the house. If everything is satisfactory, the loan will become a permanent mortgage and you will start making payments against both interest and principal.