WHAT’S A “NORMAL” LENGTH FOR CONSTRUCTION LOANS THESE DAYS?
You’re not alone—my last build took 16 months and that was with a pretty motivated crew. The 12-month loan term feels like wishful thinking unless you’re doing something super basic. I get why lenders want all the documentation, but it does feel like they’re covering themselves at our expense. Extension fees are brutal, and honestly, I think 18 months is way more realistic for anything custom these days. It’s frustrating, but I’d rather budget for the extra time than get caught off guard.
WHAT’S A “NORMAL” LENGTH FOR CONSTRUCTION LOANS THESE DAYS?
Can’t argue with you there—12 months almost never cuts it anymore. I remember back in 2018, we managed to wrap up a subdivision in just under a year, but that was pre-pandemic and we didn’t have half the supply chain headaches you see now. These days, even the most straightforward builds seem to run into delays... inspectors backed up, materials arriving late, you name it.
I’m seeing more lenders offer 18- or even 24-month terms right out of the gate, though the rates and fees can be rough. Honestly, I’d rather pay a bit more upfront than get hammered by extension penalties later. And yeah, the paperwork is a pain, but I guess with how unpredictable things are, lenders want to cover every base.
If you’re building anything custom, I’d say plan for at least 16-18 months. Anything less feels like tempting fate at this point.
I’d rather pay a bit more upfront than get hammered by extension penalties later.
Couldn’t agree more—extension fees can really eat into your margin. Lately, I’m budgeting for 20 months minimum, even on “easy” projects. If you wrap early, it’s a win, but finishing late can really sting. Definitely not the market for 12-month optimism right now.
Totally get where you’re coming from. I’ve had projects where the “quick” 12-month timeline turned into 18 months before we even got to paint colors. My rule of thumb now: add a buffer for the inevitable—delayed tile shipments, permit weirdness, or just the classic ‘waiting on that one fixture.’ If you finish early, awesome, but I’d rather have breathing room than scramble to avoid fees. The stress isn’t worth it.
WHAT’S A “NORMAL” LENGTH FOR CONSTRUCTION LOANS THESE DAYS?
That buffer is honestly a lifesaver, but it does make me wonder—are most lenders okay with that kind of wiggle room? I’ve seen “standard” construction loans quoted at 12 months, but between weather, city inspections, and, yeah, the tile that takes forever to arrive, it just seems like 12 rarely cuts it. I managed to negotiate an 18-month term last year, but I had to push for it and the rate was a bit higher.
Do most banks even offer longer terms up front, or is it more common to get a 12-month loan and then pay for extensions if needed? I’m always a little nervous about those extension fees stacking up if the project drags on. Curious if anyone’s actually finished under the original loan term—personally, I haven’t had that luck yet... Maybe I’m just too cautious with my timelines, but the risk of running over and getting hit with surprise costs stresses me out more than a slightly higher rate.
