Construction borrowers love us.

We think you will too.

Let’s Get Started

I’m an associate at a firm in Houston and used JD Mortgage thanks to your advice! The experience was great—they were super fast and responsive.” —Mary Kate Raffetto Beck Redden LLP

For a JD Mortgage, I had good luck with IBERIABank. [They] made this process very smooth.” —Clint Cowan Lynn Pinker Hurst & Schwegmann

Let’s Get Started

5 Best Construction Loans in Vermont

Key Terms

Construction loans are a type of loan that provides funding for the construction of a new building or the renovation of an existing property.
In Vermont, construction loans are available through a variety of lenders, including credit unions, community banks, and national banks.
Borrowers seeking construction loans in Vermont should be prepared to provide detailed plans for their project, as well as a down payment and proof of income and creditworthiness.

Vermont is a beautiful state that is home to many people and businesses. Known as the Green Mountain State, the population of Vermont is about 647,000 people. Even though it’s a small state by land, Vermont is still relatively sparsely populated.

Despite the small population, due to a lack of housing inventory and demand for vacation homes (Vermont is a popular ski attraction), the average sales price of a single family home is $438,127 according to the Vermont Realtors Association. Home prices are expected to continue rising as more people move into the state out of larger cities like New York City and Boston, where housing costs have become too much for many families to afford.

Many homebuyers are turning to construction loans rather than getting home loans because they figure that in this market they might as well build a new home rather than battle with sellers and other buyers in the housing market. Local real estate experts have reported that the average cost of building a new home in Vermont is $148.23 per square foot, making it an attractive option for some.

Construction loans also allow you to borrow the money upfront to finance the construction and to use the money in stages as the construction project continues. Keep reading if this is something you’re considering, as we’ll cover the advantages and disadvantages of construction loans along with a list of the best construction loan lenders in Vermont that we found during our research.

Show Me Lenders

Benefits of a new construction loan in Vermont

If you’re looking to build a new house, there are many reasons why a construction loan is the best route for you. It’s important to understand the benefits of getting a Vermont construction loan so you can make an informed decision about how to move forward with your project.

First and foremost, if you’re looking to build a home from scratch, you get to start with a blank slate. You won’t have to worry about the headaches that come with buying an existing property and trying to fix it up so that it’s livable again. Instead, you can focus on the design of your new home and decide exactly what kind of space will suit your needs best before even purchasing land or hiring an architect.

Also, because a bank will be involved in the construction, if it’s a construction-to-permanent loan you will benefit from the bank oversight of the project. After all, they have just as much incentive to get the house (their collateral) finished on time and without flaws.

Get Quotes for Your Construction Loan

5 Best Vermont construction loan lenders

If you’re in the market for building a new home in Vermont, consider these construction mortgage loans that are available to state residents.

1. Vermont State Employees Credit Union

The Vermont State Employees Credit Union got its start in 1946 when employees of the State of Vermont came together to form the financial institution. They are a not-for-profit credit union where the members own the company. VSECU has a large offering of financial products covering everything from personal through business banking, including construction and land loans.

We reached out to Vermont State Employees Credit Union to learn more about their construction loan and here is what we gathered:

They offer an adjustable rate loan with a 15-year term for the purchase and finance of your lot or land.
You can choose to apply at any time in the construction process.
Select your own general contractor to oversee your construction. A cost overrun, of up to 20%, will be applied to construction costs.
The land or lot must pass a perc test, and cannot exceed 25 acres.
If you choose to wait and build later, you will pay monthly mortgage payments on the land with a fixed monthly payment for three years and then the rate may adjust annually thereafter.
You will need to hire a general contractor. Professionals are required. You cannot act as the general contractor for your own project.
Your down payment will go into your project prior to any loan disbursements.
Construction funds are disbursed upon completion of work with a 1-year, fixed-rate loan.
After the construction loan period is completed they can refinance your land and construction loans into one of our traditional mortgage loans.