New Construction Loans Utah 2026: Fund Your Build Start to Finish
Ground-up construction is booming across Utah — from custom homes in the Wasatch Back to spec builds in St. George and workforce housing in Weber County. But construction financing works very differently from a standard purchase loan. Here’s what Utah builders and investors need to know in 2026.
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How New Construction Loans Work in Utah
A construction loan is a short-term, interest-only loan that funds in stages (called draws) as construction milestones are completed. Once the project is finished, the borrower either sells the property or refinances into permanent financing.
New Construction Loan Terms in Utah (2026)
| Feature | Typical Range |
|---|---|
| Interest Rate | 11–14% |
| Max LTV | 60–65% of completed ARV |
| Loan Term | 12–18 months |
| Draws | 4–6 milestone draws |
| Interest | Interest-only on drawn balance |
Typical Draw Schedule for Utah Construction Loans
- Land acquisition / foundation: 15–20% of loan
- Framing complete: 20–25%
- Mechanical rough-in (plumbing, electrical, HVAC): 20%
- Drywall and exterior complete: 20%
- Final completion / CO: Remaining balance
Each draw requires a site inspection. Utah lenders typically use third-party inspection services; costs are built into the loan.
What Utah Construction Lenders Want to See
- Approved building permits or permit-ready plans
- Signed contract with a licensed general contractor
- Itemized construction budget (hard and soft costs)
- Land already owned or purchased simultaneously
- Comparable sales supporting the completed ARV
- 620+ credit score and 30–40% equity contribution
Utah Markets with Strong New Construction Demand
- Eagle Mountain / Saratoga Springs: Fastest-growing cities in Utah, strong demand for new builds
- St. George / Washington County: Retiree migration driving demand
- Heber Valley: Luxury mountain market with limited existing inventory
- Ogden / Weber County: Workforce housing gap creates spec build opportunity
Frequently Asked Questions
Do I need to own the land before getting a Utah construction loan?
Not necessarily. Many Utah lenders will close the land acquisition and construction loan simultaneously, with land equity counting toward your equity requirement.
What is the minimum lot size for a Utah construction loan?
This depends on the county and zoning. Lenders care more about the appraised completed value than raw lot size.
Can I be my own general contractor on a Utah construction loan?
Some lenders allow owner-builder arrangements, but most hard money lenders require a licensed GC for new construction projects over $200k.
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Frequently Asked Questions
What is a new construction loan in Utah?
A Utah new construction loan is a short-term product that funds building a new home or commercial property. Funds are disbursed in draws as construction milestones are completed, then borrowers typically refinance into a permanent mortgage.
How does a construction draw schedule work in Utah?
Utah lenders typically release funds in 4–6 draws tied to milestones: foundation, framing, rough mechanicals, insulation/drywall, finishes, and final completion. Each draw requires an inspection before funds are released.
Can I get a construction-to-permanent loan in Utah?
Yes, many Utah banks and credit unions offer construction-to-permanent (C2P) loans that automatically convert to a 30-year mortgage upon completion, saving on closing costs. Hard money lenders offer separate construction loans with faster approval for non-standard builds.
What down payment do I need for a construction loan in Utah?
Down payments for Utah construction loans range from 20–25% for conventional programs. Hard money construction lenders may require 25–35% equity but offer faster approval and more flexible terms.
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Frequently Asked Questions
What is a new construction loan in Utah?
A Utah new construction loan funds building a new home or commercial property. Funds are disbursed in draws as construction milestones are completed, then borrowers refinance into a permanent mortgage once the project is done.
How does a construction draw schedule work in Utah?
Utah lenders typically release funds in 4–6 draws tied to milestones: foundation, framing, rough mechanicals, insulation/drywall, finishes, and final completion. Each draw requires an inspection before funds are released.
Can I get a construction-to-permanent loan in Utah?
Yes, many Utah banks offer construction-to-permanent loans that automatically convert to a 30-year mortgage upon completion. Hard money lenders offer separate construction loans with faster approval for non-standard builds.
What down payment is required for a construction loan in Utah?
Down payments for Utah construction loans range from 20–25% for conventional programs. Hard money construction lenders may require 25–35% equity but offer faster approval and more flexible terms.