New Construction Financing Options

Building your dream home is exciting — and financing it doesn’t have to be complicated. At Walnut Ridge Construction, we help you understand your construction loan options and connect you with trusted Tennessee lenders who specialize in construction-to-permanent financing for custom homes. You’ll always work directly with your lender — we simply help guide the process and ensure your build timeline, loan draws, and documentation align perfectly.

New Construction

Our Process

Our Portfolio

Understanding Construction-to-Permanent Loans

Most custom home clients use a construction-to-permanent (C2P) loan — a single loan that covers both the building phase and the final mortgage once construction is complete. It’s convenient, flexible, and reduces closing costs compared to having separate loans.

How It Works:

Construction Phase: You draw funds as your home is built (often in 4–6 “draws”).
Interest-Only Payments: You pay interest only on the money disbursed during construction.
Permanent Loan Conversion: After your home is complete, your loan automatically converts to a traditional mortgage.

Learn About Our Preconstruction Planning

Benefits of Construction-to-Permanent Loans

C2P loans simplify the financial side of custom homebuilding and provide long-term stability.

Key Benefits:

One closing instead of two
Interest-only payments during construction
Locks in your permanent rate early
Easy coordination with builder’s draw schedule
Saves time and money on fees

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Working with Your Lender

Walnut Ridge Construction partners with your lender to ensure a seamless experience. We provide detailed budgets, invoices, and progress reports for each loan draw, keeping the process transparent and organized.

Our Role Includes:

Preparing lender-ready cost breakdowns
Coordinating inspections for loan draws
Communicating project milestones
Supporting documentation for underwriting

Learn About Our Cost-Plus Model

Recommended Tennessee Lenders

We work with a select network of local banks and mortgage lenders familiar with East Tennessee’s construction market. While you’re free to choose any lender, these institutions have proven experience with construction-to-permanent loans and flexible terms for custom builds:

Common Lender Options Include:

SmartBank
SouthEast Bank
Volunteer Federal
Citizens National Bank
FirstBank
Regions Mortgage (Custom Construction Division)

Each lender has different requirements, but our team can connect you with the right fit based on your credit, location, and budget.

Request Lender Recommendations

Ready to Build a Custom Home?

Start the process today. You'll sit down with the builder and his team to discuss the entire process

What to Expect During the Loan Process

Building a custom home is different from buying an existing one. Here’s what to expect when applying for a construction loan:

Typical Loan Process:

Prequalification: Your lender reviews income, assets, and credit.
Appraisal: Based on your lot and proposed home plans.
Builder Approval: Lenders verify Walnut Ridge’s credentials and insurance (already preapproved with many regional lenders).
Draw Schedule Setup: Establishes when funds are released during construction.
Construction Phase: You make interest-only payments on funds drawn.
Conversion to Mortgage: Once complete, your loan becomes a standard mortgage with principal and interest payments.

Learn More About Our Building Process

Common Construction Loan Requirements

Lenders will require several documents to process your application efficiently. Walnut Ridge Construction provides everything needed from the builder side.

Typical Requirements Include:

Finalized home plans and specifications
Signed cost-plus builder agreement
Builder license and insurance documentation
Estimated project budget and timeline
Lot ownership or purchase contract

We Provide:
✔ Detailed cost breakdown and contract documents
✔ Construction schedule and draw requests
✔ Proof of builder insurance and bonding

View Our Cost-Plus Contract Overview

Alternative Financing Options

If a traditional C2P loan isn’t the right fit, there are other ways to finance your home:

Alternative Paths:

Lot + Construction Combo Loans: Buy your lot and build under one loan.
Home Equity Loans: Use existing equity from your current home.
Bridge Loans: Temporary financing while selling your current home.
Cash Builds: For clients funding directly without a loan.

Our team works with all financing types — we’ll coordinate with your lender to ensure smooth payments and reporting.

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Financing Transparency and Confidence

Just like our construction process, your financing journey should be stress-free and transparent. We’ll guide you through each step, making sure your home loan aligns with your goals and budget from the very beginning.

You’ll Appreciate:

Clear communication between builder and lender
Accurate documentation for each draw
No surprises or missed deadlines
Full transparency from design to closing

Request a Financing Consultation

Testimonials

Tellico Village

“We interviewed several builders before choosing Walnut Ridge, but what sold us was their open-book pricing and constant communication. We saw every invoice and cost, and there were zero surprises. The process was honest and smooth from start to finish.”

Sarah & Mark L.

Rarity Bay

“From our very first meeting, we knew we were in good hands. Kenny and his team took the time to understand our needs, our land, and our budget. Our home fits our lot perfectly and turned out even better than we imagined.”

Tom & Rachel B.

Loudon County

“The craftsmanship is outstanding. Every trim line, cabinet, and stone detail feels intentional. It’s clear Walnut Ridge Construction takes pride in every home they build.”

Greg & Melissa K.

WindRiver Community

“We were building from Florida, and Kenny kept us updated with progress photos, budget reports, and quick responses. We never felt out of the loop, even from hundreds of miles away.”

David & Karen T.

Monroe County

“We’ve built before, and this was by far the best experience. The cost-plus contract gave us peace of mind, and the workmanship exceeded expectations. We would recommend Walnut Ridge to anyone building in Tennessee.”

Mark & Sheila R.

Blount County

“I've had the pleasure of knowing the general contractor of Walnut Ridge Construction, Kenny Schmidt, for over 20 years. So, when it came time to build a house, there's only one person I trusted to take care of me. You'll never meet a more honest person in your life.”

David M. & Melanie W.

Frequently Asked Questions

What type of loan do I need to build a custom home?

Most clients use a construction-to-permanent loan, which covers both the build phase and the final mortgage with one closing.

Can Walnut Ridge recommend a lender?

Yes. We work with several trusted East Tennessee lenders who specialize in construction-to-permanent financing for custom homes.

Do I make payments during construction?

Yes, but only interest on the funds disbursed. Once construction is complete, your loan converts into a traditional mortgage.

Can I use my own bank or credit union?

Absolutely. We coordinate with any lender and provide all necessary documents for draw requests and builder approvals.

Does Walnut Ridge offer in-house financing?

No. We’re not a lender, but we help guide you through the process and work closely with your chosen bank or mortgage company.

East Tennessee’s trusted builder for custom homes, additions, and renovations crafted with care and a foundation of honesty, transparency, and integrity. Trust your home with Walnut Ridge Construction.