For many homebuyers, it’s the realization of a dream: a house in the country, with acreage and distant neighbors. But the imbalance of home value to land value can make finding a mortgage challenging.

Construction loans are short-term, interest-only loans used to build on undeveloped land. Qualification for FHA construction loans requires a 3.5% to 10% downpayment and a credit score of 500+.

A construction loan provides short-term financing for building a new home or renovating an existing home you’re purchasing. Loan terms are usually 12 to 18 months, during which time you make ...

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