Best Lenders for Construction Loans and Land Loans in Alabama
We’ve developed a list of the best lenders in Alabama for construction loans (also called temporary to permanent or temp-to-perm loans) and land loans/lot loans. Our list includes banks and lenders who offer construction loans and lot loans to individuals in major cities like Birmingham, Huntsville, and Mobile as well as smaller areas throughout the rest of Alabama. The data listed in the table is accurate as of February, 2019.
Our table illustrates key criteria necessary for picking a construction lender for your prefab dream home. The elements we've listed include:
Lending Products - construction loan (temporary to permanent loan), lot loan/ land loan, 2-in-1 loan (most lenders still call this a construction loan but allow for the purchase of land and immediate construction).
Loan to Value (LTV) % / Loan to Cost (LTC) % - this is used to determine how much of your project must be paid in cash rather than being covered by a loan. For example, 90% loan to value requires 10% cash down. Loan to value refers to the appraised, post-construction value of the project. Whereas, loan to cost is based off the contractor/builder quoted cost of the project. For example, a project may be quoted as costing $300,000 but its post construction appraisal may be more valuable at $375,000.
Minimum Credit Score - while most lenders have minimum credit scores for some products, they often look at a broader range of lending factors. Therefore, some exceptions to credit score may exist
Debt to income ratio (DTI Ratio) - the percentage of an individual's gross income that goes towards paying debts
Maximum lending amounts - most lenders have a standard limit of $484,351 for their traditional loans, and loans exceeding this amount often use Jumbo lending rates (listed if available)
Approval times - although this relies heavily on the buyer submitting the necessary paperwork on time, the underwriting times listed assume a complete and on time application
Other distinguishing features - some lenders offer rate reductions for banking customers. Also, some banks may only lend in their banking footprint - in this case specific counties are listed.
| Name | States | Construction Loan | Construction LTC/LTV Ratio | Land Loan Product | Land LTC/LTV Ratio | 2-in-1 Loan | Minimum Credit Score | DTI Ratio | Maximum Lending Amount | Underwriting Period | Notes |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Alabama AG Credit | Alabama | ✓ | 80% LTV | ✓ | ✓ | Must be a rural property - minimum 10 miles from city limits | |||||
| Alabama Credit Union | Alabama | ✓ | 90% LTV | ✓ | ✓ | 40% | |||||
| Alabama One Credit Union | Alabama | ✓ | 80% LTV | ✓ | 80% | ✓ | 620 | 45% | None (pending appropriate approval) | About 4 weeks | Land loans require 30% down. Also serves out-of-state counties that border Alabama |
| Alabama Teachers Credit Union | Alabama | ✓ | 80% LTV | ✓ | 80% | ✓ | 45% | Must be a member to receive a loan, Operate in the following counties: Calhoun, Cherokee, Dekalb, Etowah, Marshall | |||
| Assurance Financial | Alabama | ✓ | 90% LTV | ✓ | ✓ | $424,000 (higher borrowing amounts require a jumbo loan) | Only serve the cities of Tuscaloosa and Birmingham | ||||
| Auburn Bank | Alabama | ✓ | 89% LTV | ✓ | ✓ | 620 | 38% | $484,000 (higher borrowing amounts require a jumbo loan) | About 4 weeks | Primarily serves Lee County | |
| Bank Independent | Alabama, Mississippi, Tennessee | ✓ | 80% LTV | ✓ | 70% | ✓ | 640 | 40% | $484,350 (higher borrowing amounts requiring amounts require jumbo loan) | About 4 weeks | |
| BB&T | Pennsylvania, Alabama, Georgia | ✓ | 80% LTV | ✓ | 700 | 43% | $2,000,000 | 4-6 weeks | |||
| Cadence Bank | Alabama, Florida, Georgia, Mississippi, Texas, Tennessee | ✓ | 80% LTV | ✓ | 90% | ✓ | 700 | 43% | $2,000,000 | 1-2 Months | Builders must be pre-approved by the bank |
| CCB Community Bank | Alabama, Florida | ✓ | 85% LTC | ✓ | 85% | ✓ | 660 | 43% | $450,000 | About 4 weeks | Primarily serves Southern Alabama and the Florida panhandle |
| Citizens Bank & Trust | Alabama | ✓ | 80% LTV | ✓ | ✓ | About 4 weeks | Primarily serves Northern Alabama | ||||
| Kessler Federal Credit Union | Alabama, Mississippi, Louisiana, Florida | ✓ | 80% LTV | ✓ | 90% | ✓ | 38% | $484,350 or $150,000 for land loans | |||
| Liberty Financial | Alabama, Tennessee, Mississippi, Kentucky, Indiana, Illinois | ✓ | 95% LTV | ✓ | 80% | ✓ | 680 | 50% | $850,000 (higher borrowing amounts require a jumbo loan) | Loans with 5% cash down require at least an additional 5% in liquid/ accessible reserves | |
| Merchants Bank of Alabama | Alabama | ✓ | 80% LTV | ✓ | 80% | ✓ | 620 | 38% | 1 week | Only serves Coleman and Arab counties | |
| National Bank Of Commerce | Alabama | ✓ | 90% LTC | ✓ | ✓ | 680 | 43% | $484,350 | 1 week | ||
| Trustmark National Bank | Alabama, Florida, Mississippi, Tennessee, Texas | ✓ | 80% LTV | ✓ | ✓ | 640 | 45% | $478,000 (higher borrowing amounts require a jumbo loan) | About 4 weeks | ||
| WSFS Bank | Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming, Pennsylvania | ✓ | 80% LTV | ✓ | 70% | ✓ | 620 | 40% | Land Loan - $500,000, Construction Loan - $1,500,000 | 6-8 weeks |
If you have previously used a lender that is not on this list or if you are a lender that offers construction loans in this area and are not on this list, please contact us here.
