Before You Build: 5 Things to Know About Construction Financing

Building a country home is rewarding, but it does require special planning. Loan Officer Leigh Rodebaugh has extensive experience guiding her clients through the construction loan process. Here are the top five things she wants all her clients to know before they build:

Know your budget before falling in love with a floor plan.

It’s important to talk with a lender early about what you can comfortably afford before you are committed to your home’s design. Factors like location, the size and complexity of your build, and material choices can all greatly impact the overall cost of your new home. Additionally, your down payment amount, credit score, and current interest rates can all affect your monthly payments. An experienced lender understands all these factors and can better guide you if you start a conversation early in your process.

Budget for the entire project—and leave room for surprises.

Build a budget that includes land, site preparation, permits, utility connections, the home itself and closing costs. For rural properties, investigate well, septic, driveway and other utility expenses early. Set aside a contingency fund and ask how unexpected costs or upgrades would be covered. Working with a lender who understands the unique process of building a rural home can be a huge advantage – and can save you time and money in the long run.

Understand how money—and payments—work during the build.

Construction funds are typically released in stages, called draws, as work progresses. As construction milestones are reached, such as the foundation, framing, and roofing, additional funds will be released. Each month, you pay interest only on the money that has been disbursed. Your monthly interest will increase as additional funds are dispersed. Ask for payment estimates throughout the build, and plan for any overlap with your current housing costs so you can budget accordingly.

Understand what happens to the loan when construction ends.

Most traditional lenders require you to close on your construction loan and then close again on a permanent mortgage once construction is complete. Compeer Home offers clients a one-time close construction loan that combines construction and permanent mortgages into one seamless process and avoids additional applications and extra costs. You also have the option to lock in your rate upfront to avoid rate shifts as you build. Unlike most lenders, you also have the option to serve as your own general contractor with Compeer Home.

Have a clear plan with your builder before construction starts.

Working with a builder who is experienced in rural home builds will help you simplify the process and catch roadblocks before they happen. Be sure to interview potential builders and learn more about their experience, especially if you’re building a unique home such as a barndominium. Once you choose a builder, getting detailed plans, an itemized budget and construction contracts will help establish what you’re financing. Before signing, clarify what’s included, how changes will be priced, who approves them and what happens if construction runs late. Ask your lender how delays could affect the loan’s deadline and costs.

Understanding the unique factors involved in a rural build will simplify the process and reduce your stress throughout your construction process. You can learn more from loan officers Leigh Rodebaugh and Chad Young at Compeer Home’s upcoming free construction webinar on December 9, 2026 at 1:00 pm CST.

You’ll learn:

• The basics of construction financing and how Compeer Home provides support
• How to evaluate construction loans
• Clear next steps on what to get done before breaking ground

Can’t attend? Sign up anyway, and we’ll send you the recording to watch at your convenience.

Your newly constructed home starts with the right financing partner. Whether you’re ready to build now or you’re still exploring your options, Compeer Home offers flexible solutions for construction loans, backed by our experienced team of loan officers with the rural-know-how to help you build with confidence.