Key Takeaways
- Three lenders that publish construction-to-permanent rates listed 30-year fixed rates of 7.125% to 7.375% in November 2026, close to the 7.201% (7.270% APR) national average conventional 30-year purchase rate on Nov. 10, 2026 (Mortech).
- Fannie Mae limits a single-closing construction period to 12 months, with extensions up to 18 months total; cash-out refinances are not eligible.
- FHA, VA and USDA all allow one-time close construction loans; USDA’s version is a 30-year fixed loan with no down payment and up to 12 months of payment reserves.
Construction loan rates are close to regular mortgage rates when you use a one-time close loan. As of November 2026, three lenders that post construction-to-permanent rates on their own sites listed 30-year fixed starting rates of 7.125% (Space Coast Credit Union), 7.25% (MIDFLORIDA Credit Union) and 7.375% (Lighthouse Credit Union), compared with a 7.201% (7.270% APR) national average for a conventional 30-year purchase loan on Nov. 10, 2026. A construction-only loan is a separate short-term loan that you replace with a permanent mortgage later, so you close twice and take rate risk in between. Your rate depends on your credit, down payment, the lender and the project.
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- Published construction loan rates (2026)
- One-time close vs. construction-only loans
- FHA, VA, USDA and conventional construction loan rules
- How interest-only payments work during construction
- How we got these numbers
- Construction loan FAQ
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Published construction loan rates (2026)
Few lenders publish construction rates. These are “as low as” rates from lenders that do, each on its own site, compared with the Mortech average conventional 30-year fixed purchase rate of 7.201% (7.270% APR) on Nov. 10, 2026.
| Lender | Product | Published rate (APR) | Rate date | Vs. 7.201% average | Down payment |
| Space Coast Credit Union | Construction-to-permanent, 30-year | 7.125% (7.217% APR) | Nov. 4, 2026 | 0.076 points lower | As little as 10% |
| Space Coast Credit Union | Construction-to-permanent, 15-year | 6.375% (6.521% APR) | Nov. 4, 2026 | n/a (different term) | As little as 10% |
| MIDFLORIDA Credit Union | Construction-to-permanent, 30-year fixed (example) | 7.250% (7.381% APR) | Nov. 2, 2026 | 0.049 points higher | As low as 10% (fixed) |
| MIDFLORIDA Credit Union | Construction-to-permanent, 1/1 ARM | 6.125% (7.248% APR) first year | Nov. 2, 2026 | n/a (adjusts yearly) | 20% (ARM) |
| Lighthouse Credit Union | Construction, 30-year fixed | 7.375% (7.648% APR) | Nov. 10, 2026 | 0.174 points higher | Finances up to 95% |
Published rates are best-case prices that depend on credit score and other factors; the Mortech figure is a national average. MIDFLORIDA's fixed example assumes a 720 credit score, $300,000 and 10% down. Lighthouse lends only on homes built in New Hampshire, Massachusetts, Maine or Vermont.
The takeaway: in this small sample, the published one-time close rates sat within about 0.2 points of the national average for a regular purchase loan. Fees are where construction loans differ. Space Coast, for example, lists an origination fee of $1,100 plus 0.25% of the loan amount and collects $1,400 at closing for inspections and builder draws, refunding any unused amount.
Today’s average conventional 30-year rate, updated daily, is 7.227 (7.305 APR) as of November 11, 2026.
Compare today's mortgage rates. Start here
One-time close vs. construction-only loans
| Feature | One-time close (construction-to-permanent) | Construction-only (two closings) |
| Closings | One, before construction starts | Two: the construction loan, then a separate permanent mortgage |
| Rate on the permanent loan | Typically set at the first closing | Set at the second closing, at whatever rates are then |
| Payments during the build | Usually interest only on funds drawn | Usually interest only on funds drawn |
| Re-qualifying | May be required at conversion if value falls or documents expire | You apply and qualify again for the permanent loan |
| Best fit | Buyers who want one set of closing costs and a known rate | Longer or complex builds, or buyers who expect rates to fall |
With a one-time close loan, construction financing converts to a regular mortgage when the home is finished. Space Coast, for example, offers a 12-month rate lock for its construction period and says the lock expires if the build runs past 12 months. With a construction-only loan, you pay closing costs twice and could face a higher rate when you refinance into the permanent loan. Fannie Mae says builds longer than its single-closing limits must use a two-closing transaction. For the basics, see how home construction loans work.
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FHA, VA, USDA and conventional construction loan rules
| Program | One-time close? | Down payment | Key rules | Source date |
| Conventional (Fannie Mae) | Yes, single-closing or two-closing | Based on LTV of the lesser of cost (lot + construction) or as-completed value | Construction period max 12 months, 18 months total with extensions; permanent term up to 30 years after construction; cash-out not eligible | Selling Guide B5-3.1-02, May 6, 2026 |
| FHA | Yes, Construction to Permanent program | Standard FHA purchase LTV | Builder must be a licensed general contractor; you can act as your own only if you are licensed; you must buy the land at closing or already own it | HUD Mortgagee Letter 2019-08, May 16, 2019 |
| VA | Lender-dependent; VA purchase loans can be used to build | No down payment if price does not exceed appraised value | Find a VA lender with a construction product; funds go into a draw account and you approve each draw; guaranty issued after a clear final compliance inspection | VA.gov, updated Jan. 7, 2026 |
| USDA (guaranteed) | Yes, single close | No down payment | 30-year fixed; up to 12 months of payment reserves; fixed rate during construction; builder needs 2+ years of experience and $500,000 liability coverage; you cannot be your own builder | USDA Rural Development, January 2024 |
Program details by loan type: FHA construction loan requirements, VA construction loan guide and USDA construction loans. Fannie Mae also requires all work to be finished and paid for, with liens cleared, before the permanent loan is delivered, and it does not allow attached condos or co-ops (B5-3.1-01). On USDA loans, contingency reserves for cost overruns are limited to 10% of construction cost, and borrowers can pay interest from a reserve or their own funds.
For VA loans, the rules above come from VA.gov and a VA announcement republished Aug. 6, 2025. Not every VA lender offers construction financing, so ask early.
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How interest-only payments work during construction
During the build, lenders release money to the builder in draws as work is completed. You typically pay interest only on the amount drawn so far, not the full loan. Space Coast and MIDFLORIDA both describe their construction phases this way.
Monthly interest = amount drawn × annual rate ÷ 12
Assumptions, for illustration only: a $400,000 construction loan, a sample rate of 7.25% (not a quote), a 12-month build and four draws.
| Months | Amount drawn | Monthly interest-only payment |
| 1–2 | $80,000 | $483.33 |
| 3–4 | $180,000 | $1,087.50 |
| 5–7 | $300,000 | $1,812.50 |
| 8–12 | $400,000 | $2,416.67 |
| Total interest, 12 months | $20,662.50 |
Once the loan converts, payments become fully amortizing. At the same 7.25% sample rate over 30 years, principal and interest on $400,000 would be $2,728.71 a month, about $312 more than the final interest-only payment. Taxes and insurance are extra. If the build runs long, interest keeps accruing and a rate lock can expire.
How we got these numbers
On Nov. 10, 2026, we searched for lenders and credit unions that publish construction loan rates on their own websites and recorded the rate, APR, date and terms each listed. We took program rules from Fannie Mae’s Selling Guide, HUD Mortgagee Letter 2019-08, USDA Rural Development and VA.gov. The comparison rate is the Mortech national average conventional 30-year fixed purchase rate for Nov. 10, 2026. The interest-only example uses a sample rate we chose for illustration.
Construction loan FAQ
Sources: Fannie Mae Selling Guide B5-3.1-02, Fannie Mae Selling Guide B5-3.1-01, HUD Mortgagee Letter 2019-08, USDA Rural Development Single Close Construction, VA.gov Purchase Loan, VA construction loan announcement, Space Coast Credit Union, MIDFLORIDA Credit Union, Lighthouse Credit Union, ProFed Credit Union, Mortech national average rates (Nov. 10, 2026).
