Your Guide to Financing New Construction in Dallas

By Steven Thomas, Refind Realty

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.
Download the Lone Star App here: https://lonestarliving.hsidx.com/@sthomas

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