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A newly built suburban home in Dallas with blue skies and a 'Sold' sign out front, symbolizing successful new construction financing.

Your Guide to Financing New Construction in Dallas

May 21, 20253 min read

Your Guide to Financing New Construction in Dallas

By Steven Thomas, Refind Realty

A newly built suburban home in Dallas with blue skies and a 'Sold' sign out front, symbolizing successful new construction financing.

Introduction

Buying a brand-new home in Dallas is exciting. But when it comes to financing, it can feel like a different ballgame compared to purchasing an existing property. I work with buyers every day who are navigating this process, and I’ve seen the same questions and challenges come up. This guide will break it all down so you can move forward with confidence.

Construction Loans vs Traditional Mortgages

When you're financing a new construction home in Dallas, there are two main paths:

1. Builder-Financed New Construction

This is the most common route in master-planned communities across DFW. Builders work with preferred lenders who offer buyers incentives like rate buy-downs or closing cost assistance.

Pros:

  • Simpler process

  • Incentives from the builder

  • Typically a standard 30-year fixed mortgage

Cons:

  • You’re limited to the builder’s lender list unless you negotiate otherwise

2. Construction-to-Permanent Loan

If you're building on your own lot or doing a custom home, this loan covers both the construction phase and converts to a permanent mortgage once the home is complete.

Pros:

  • One-time closing

  • More control over the builder and design

Cons:

  • More paperwork

  • Typically higher initial costs

If you’re unsure which route fits your plans, I can help you compare lender programs and guide you through the pros and cons.

Pre-Approval Is Still Key

Whether you’re buying a spec home or doing a full custom build, your first step should always be getting pre-approved. Not only does this help you know what you can afford, but many builders won’t even accept your contract without it.

Use my pre-approval resource here:
👉 Get Pre-Approved

Common Loan Types for New Construction

  • Conventional Loan: Most common for builder-financed deals

  • FHA Loan: Low down payment, more lenient credit requirements

  • VA Loan: For eligible veterans and active-duty service members

  • Jumbo Loan: For homes exceeding the conforming loan limit (currently $766,550 in most of Texas)

Each comes with different credit, down payment, and debt-to-income requirements. That’s why working with a knowledgeable lender is crucial—and I can connect you with trusted options in Dallas.

Builder Incentives: Worth It?

In 2025, many builders across Dallas-Fort Worth are offering generous financing incentives to attract buyers. These include:

  • Rate buy-downs (as low as 3.99% for year one)

  • Thousands in closing cost credits

  • Appliance or design center upgrades

You’ll typically have to use the builder’s lender to qualify. But don’t feel locked in—sometimes I help clients use that offer as leverage with their preferred lender.

Timing and Rate Locks

New construction homes can take 6 to 12 months to complete. That’s a long time in mortgage terms, so you’ll want to ask your lender about long-term rate locks. Some offer 270-day locks with a one-time float down if rates improve.

This protects you if rates climb before you close.

FAQs

1. Can I use any lender for a new construction home?
Yes, though many builders offer incentives only if you use their preferred lender.

2. Do I need a different loan if I’m building on my own lot?
Yes. You’ll likely need a construction-to-permanent loan.

3. What’s the minimum credit score to finance new construction?
Most lenders want a score of 620 or higher. For FHA, it can go as low as 580.

4. How much do I need for a down payment?
It depends. Conventional loans often require 5 to 20 percent. FHA is as low as 3.5 percent.

5. When do I start paying the mortgage?
With a standard mortgage, after closing. With a construction loan, you’ll make interest-only payments during the build.

Conclusion

Financing new construction doesn’t have to be complicated. With the right guidance and team behind you, you can secure the home you’ve been dreaming of—on terms that make sense for your budget and lifestyle.

If you’re ready to start or just want help comparing loan options, let’s talk.
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Steven J Thomas
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Owned and Operated by Thomas & Thomas Financial Group, LLC

Steven J. Thomas

Steven J. Thomas has been in the financial services industry for the past 19 years and started my career as a Financial Planner for American Express Financial Advisors. I entered into banking with JP Morgan Chase as personal banker in 2003 and was promoted several times up to Small Business Specialist. I earned multiple Million Dollar Club awards and was ranked in the top 5 Small Business Specialist before I branched out in 2005 to start my own Financial Management Company. I ran a successful company before family circumstances lead me to Wachovia Bank in 2008 where I worked as a Senior Financial Specialist. As a Sr. Financial Specialist; I was responsible for the P & L and revenue growth of my banking center. The elimination of my role thru a bank merger lead me to BBVA Compass. I have held various leadership roles at BBVA Compass including Personal Relationship Manager, Branch Retail Executive, Workplace Solutions VP, and his current role as a Retail Manager. As the Regional Workplace Solutions VP, I was responsible for the strategic, tactical, and execution of Partnership Banking relationships, promotion and activity with corporate and non-profit companies in my footprint. I was responsible for the acquisition production for three districts, which includes 51 banking centers and over 300 employees. In May of 2014, I joined the team at Refind Realty and became one of the managing partners in mid-2015.

  • 50+ 5 Star Reviews

  • Over $60,000,000 in Total Real Estate Sales

  • 167 Properties Sold

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succesfull real estate agent testimonials

I used this realtor and it was a great experience. He was patient and very helpful with our journey. He also helped us find a great lender with little hassle on the process, also got us approved for well above the market of our original home so we were able to get more house with a lower mortgage rate. So to anyone who is interested in buying a home take my advice give Steven a call. It’s worth it 😁

Bryant Loring

Steve was absolutely amazing! Everything was easy! Very professional in all aspects. Punctual, responsive, and diligent. He goes above and beyond to ensure you get to see as many homes as you’d like no matter the location. Not only was he knowledgeable about home buying, he also has a resourceful network for new home owner needs. I recommend Refind Realty to everyone!

Nicholas Bishop

I definitely recommend Steven to assist with your home buying needs. As a first time home buyer the process can be overwhelming, but as my realtor he was knowledgeable & patient while addressing my concerns and assisting me with my new home purchase. Thanks again Steven!! :-)

Gayle Mason

Ask Us Anything

Frequently Asked Questions

Why do you need a Realtor?

When buying or selling a home, there are so many options…which can also present a lot of obstacles. Laws change, forms change, and practices change all the time in the real estate industry. Because it’s our job to stay on top of those things, hiring a realtor reduces risk, and can also save you a lot of money in the long run.

When you work with me as your Realtor, you’re getting an expert who knows the area; knows how to skillfully guide your experience as a seller or buyer; can easily spot the difference between a good deal and a great deal. My job is to translate your dream into a real estate reality, and I work hard to earn and keep my business. This also means earning your trust: When you work with me, you’ll be working with a realtor who looks out for your best interests and is invested in your goals.

Which loan should you choose?

There are two different types of loans conventional loans and government-backed loans. The main difference is who insures these loans:

1 - Government-backed loans (FHA, VA and USDA):

(a) - Are, unsurprisingly, backed by the government.

(b) - Include FHA loans, VA loans, and USDA loans.

(c) - Make up less than 40 percent of the home loans generated in the U.S. each year.

2 - Conventional loans

(a) - Are not backed by the government.

(b) - Include conforming and non-conforming loans (such as jumbo loans).

(c) - Make up more than 60 percent of the loans generated in the U.S. each year.

What is the difference between FHA, VA and USDA loans?

1 - FHA LOANS:

FHA loans, which are insured by the Federal Housing Administration, are typically designed to meet the needs of first-time homebuyers with low or moderate incomes. FHA loans can be approved with a down payment of as little as 3.5 percent and a credit score as low as 580.

FHA loans are often called “helper loans,” because they give a leg up to potential borrowers who may not be able to secure one otherwise. For this reason, FHA loans have maximum lending limits, which are determined based on housing values for the county where the for-sale home is located.

Because the agency is taking on more risk by insuring FHA loans, the borrower is expected to pay mortgage insurance both at the time of closing and on a monthly basis, and the property must be owner-occupied.

2 - VA LOANS:

VA loans are backed by the Department of Veterans Affairs and they are guaranteed to qualified veterans and active-duty personnel and their spouses. VA loans can be approved with 100 percent financing, meaning VA borrowers are not required to make a down payment.

Unlike FHA loans, borrowers do not have to pay mortgage insurance on VA loans.

3 - USDA LOANS:

You may also hear about USDA loans, which are backed by the United States Department of Agriculture mortgage program. USDA loans are intended to support homeowners who purchase homes in rural and some suburban areas. USDA loans do not require a down payment and may offer lower interest rates; borrowers may have to pay a small mortgage insurance premium in order to offset the lender’s risk.

What’s a conventional loan? Understanding what it means to be conforming and non-conforming

Buyers who have a more established credit history and a larger down payment may prefer to apply for a conventional loan. These loans may offer a lower interest rate and only require the home buyer to purchase monthly mortgage insurance while the loan-to-value ratio is above a certain percentage, so a conventional loan borrower can typically save money in the long run.

Conventional loans are divided into two types: Conforming loans and non-conforming loans.

1 - CONFORMING LOANS:

Conforming loans are those that meet (or conform to) predetermined standards set by Fannie Mae and Freddie Mac — two government-sponsored institutions that buy and sell mortgages on the secondary market. By selling the loans to "Fannie and Freddie," lenders can free up their capital and return to issue more mortgages than if they had to personally back every loan that they approve.

The main standard for conforming loans is that the amount borrowed must be under a certain amount; in Alaska, a single-family home loan must be under $647,200 in order to be considered conforming.

Properties with more than one unit have higher limits.

2 - NON-CONFORMING (JUMBO) LOANS:

But what happens if a borrower wants to borrow more than the Freddie- and Fannie-approved loan amount? In this case, they would have to apply for a “jumbo loan,” which is the most common type of non-conforming loan.

Because the lender cannot resell the jumbo loan (or any non-conforming loan) to Freddie Mac or Fannie Mae, jumbo loans are considered to be riskier than a conforming loan. To protect against this risk, the bank will typically require a higher down payment; the interest rate on a jumbo loan may also be higher than if the same borrower applied for a conforming loan.

What kind of rate should you choose?

Rate types: Fixed-rate vs. adjustable-rate mortgages.

In addition to the loan type you choose, you’ll also have to determine if you want a fixed-rate mortgage or an adjustable-rate mortgage (ARM). A fixed-rate mortgage has an interest rate that does not change for the life of the loan, so it provides predictable monthly payments of principal and interest.

An adjustable-rate mortgage typically offers an initial introductory period with a low-interest rate. Once this period is over, the interest rate adjusts periodically, based on the market index. The initial interest rate on an ARM can sometimes be locked in for different periods, such as one, three, five, seven, or 10 years. Once the introductory period is over, the interest rate typically readjusts annually.

Office 1229 E. Pleasant Run Ste 224, DeSoto TX 75115

Call :(713) 505-2280

Site: www.stevenjthomas.com

Owned and Operated by Thomas & Thomas Financial Group, LLC