Construction Loans
Construction Loans in Indiana
Building a custom home in Fishers, Carmel, Westfield, or Zionsville is one of the most personal financial decisions you will ever make, and the financing behind it deserves the same care as the floor plan. Construction loans work differently than a standard purchase mortgage, and getting the structure right from the start saves you money, headaches, and surprises at the closing table. Tevis Durbin has spent more than 26 years helping Indiana families navigate exactly this kind of complexity, and the Durbin Team is one of the few lending teams in Hamilton County that works construction loan files from contract to certificate of occupancy.
One-Time Close vs. Two-Time Close
The first decision you will make is whether a One-Time Close or a Two-Time Close structure fits your project better. Most buyers building in the greater Indianapolis area start with the One-Time Close because it does exactly what the name promises: you close once, your rate is locked before a single nail is driven, and that same loan automatically converts to your permanent mortgage when construction wraps up. You pay one set of closing costs, you deal with one round of underwriting, and you walk into your finished home with your financing already in place. For buyers working with production builders in Carmel or custom builders in Boone County, that simplicity is hard to beat.
A Two-Time Close takes a different approach. You take out a standalone construction loan to fund the build, then refinance into a permanent mortgage once the home is complete. That second closing means a second set of costs and a second underwriting review, but it also gives you more flexibility on loan amount, timeline, and lender choice at conversion. If your project is unusually large, your build timeline stretches well past a year, or your financial picture is likely to change before completion, a Two-Time Close can be the smarter long-term play. Tevis will walk you through both options and tell you plainly which one fits your situation.
Program options
- FHA One-Time Close: Built for buyers who want a lower barrier to entry. You can put as little as 3.5% down, and the minimum qualifying credit score is 620. Construction terms are available at 6, 9, or 12 months depending on your build timeline, and you make interest-only payments during the construction phase so your monthly obligation stays manageable while the home is being finished.
- VA One-Time Close: If you have earned your VA benefit, you can build with zero down. The minimum credit score is 620, construction terms run 6, 9, or 12 months, and like the FHA version, you pay interest only while the home is under construction. It is one of the most powerful tools available to veterans and active-duty service members in Indiana, and the Durbin Team is experienced in getting VA construction files across the finish line.
- Conventional One-Time Close: For buyers with stronger credit who want to avoid mortgage insurance long-term or prefer conventional guidelines, this option requires 5% down and a minimum 700 credit score. Construction terms are the same (6, 9, or 12 months), and the same interest-only payment structure applies during the build.
Why builders and buyers choose it
The rate lock is the feature buyers most often underestimate until rates move. With a One-Time Close, you lock your permanent rate at the start of the process, before ground is broken. In a market where rates can shift meaningfully over a six-to-twelve-month build, that certainty has real value. You are not gambling that the rate environment will cooperate by the time your builder hands you the keys.
The interest-only payment period matters just as much. During construction you are almost certainly paying rent or a mortgage somewhere else. The last thing you need is to carry a full principal-and-interest payment on a home you cannot live in yet. Interest-only draws during the build keep your cash flow workable while the project progresses.
And for builders, the One-Time Close is a cleaner process. Draws are structured, approvals are already in place, and there is no risk of the buyer’s permanent financing falling through at the end. That makes the Durbin Team’s construction loan clients easier to work with on the builder side, which matters when you are trying to get a reputable custom builder in Hamilton or Boone County to take your lot.
If you are thinking about building in the Indianapolis area and want to know exactly what you can qualify for before you talk to a single builder, reach out to Tevis and the Durbin Team. They will give you a straight answer, a realistic budget, and a clear path from empty lot to front door. NMLS #424899.
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