620 Treeline RD., Kalispell, MT 59901
620 Treeline RD., Kalispell, MT 59901
Building a home is one of the most exciting and complex financial decisions you’ll ever make. Construction loans work differently than standard purchase mortgages — they fund in stages as your home is built, and then convert to a permanent mortgage once construction is complete. Getting pre-qualified early in the process isn’t just a good idea — it’s essential.
At Grizzly Mortgage, we work with buyers throughout the Flathead Valley who are building everything from starter homes in established Kalispell neighborhoods to custom homes on acreage outside Whitefish. As an independent brokerage, we work with multiple lenders to find the right construction loan structure for your project and timeline.
Give us a call at 406-890-8464 to start the conversation before you sign a builder contract.
Finance the construction of your custom home rather than settling for what’s available on the market.
Loan funds are released in draws at key construction milestones — so you only borrow what’s been built.
Construction-to-permanent loans roll into a standard mortgage at completion — often with just one closing and one set of fees.
We understand the Flathead Valley building market and can help you navigate lender requirements for your specific project.
A construction-to-permanent loan with a fixed rate locks in your interest rate at the start of the process, protecting you from rate increases during the build period. Once construction is complete, the loan automatically converts to a fixed-rate permanent mortgage with the same rate — giving you long-term payment stability.
Some construction loans offer an adjustable-rate option for the permanent mortgage phase, starting with a lower initial rate before adjusting after a fixed period. This may make sense if you expect rates to drop or plan to refinance in the near future. Ask us which structure makes the most sense for your project timeline and financial goals.
A standard mortgage is based on the current value of an existing home. A construction loan is based on the projected value of the completed home and funds in stages — called draws — as construction progresses. During the construction phase, you typically pay interest only on the amount that has been drawn. Once construction is complete, the loan either converts to a permanent mortgage or you obtain separate permanent financing.
Not necessarily. Some construction loans allow you to purchase the land and finance the construction under a single loan. Others require you to own the land outright before construction financing begins. If the land has an existing mortgage, that may affect your options. We’ll walk you through the different structures during your initial consultation so you can plan accordingly.
Construction loan draws are scheduled disbursements of funds released at key milestones in the building process — such as foundation completion, framing, rough-in plumbing and electrical, insulation, drywall, and final completion. Each draw is typically preceded by a lender inspection to verify the work has been completed before funds are released. Your builder will invoice for each draw and the funds are paid directly.
Most construction loans have a term of 12 months to cover the building period. Extensions are sometimes available if your project runs over schedule. Montana’s weather and the pace of the Flathead Valley construction market can both affect timelines, so we always recommend building in a buffer when planning your project. We’ll help you understand realistic timelines before you start.
Construction loans typically require a higher credit score than standard purchase mortgages — most lenders look for 680 or above, though requirements vary. The higher threshold reflects the additional risk and complexity involved in financing a home that doesn’t exist yet. If your score is below that threshold, we’ll talk honestly about your options and what steps you might take to strengthen your application.
Most lenders require that the builder be licensed in Montana and meet the lender’s specific approval requirements. Some lenders maintain lists of pre-approved builders, while others evaluate builders on a case-by-case basis. We recommend discussing your builder choice with us early in the process — before you sign a contract — so we can confirm whether they meet lender requirements.
Yes — VA construction loans are available for eligible veterans and service members. The process is more complex than a standard VA purchase loan, but the same core benefits apply: zero down payment and no private mortgage insurance. Construction-to-permanent VA loans are available through select lenders. Give us a call and we’ll walk you through the VA construction process specifically.
Cost overruns are a real risk in any construction project, and it’s important to plan for them. Your initial loan is based on the approved project budget — if costs increase beyond that amount, you may need to cover the difference out of pocket or seek a change order from your lender. This is one reason we recommend building a contingency buffer of at least 10–15% into your project budget from the start. We’ll help you think through this before you commit.