Capital Kings LLC

New Construction Loans in Houston, TX.

One loan for the lot and the build on a Houston spec house: the lot advance funds at closing and the construction budget follows the framing, mechanicals and finish in inspected draws. No zoning code means the lot question in Houston is deed restrictions and drainage, not a rezoning hearing.

Get a construction term sheet →Size your build

Prefer to talk it through? Call or text Micah at (281) 636-5682.

Reviewed by Micah Foster, Founder & CEO · October 2026

Worked example, October 2026Oak Forest, $150,000 lot + $390,000 build, one finished build, Lower Fees

Loan$459,000

Lot + build $540,00085% funded

Lot, at closing$69,000
Build, in draws$390,000
You bring toward it$81,000

Rate10.49%

Cash to close$105,802

Proof of funds$188,377

Price my Houston build →

In short Terms as of October 2026

Houston new construction loans fund the lot and the build on one loan, capped at 65% to 75% of the completed value. A first build backed by a general contractor with 5 or more completed builds gets 85% of total cost at 11.49% with 2% origination. After one completed build you have two options: Lower Fees stays at 85% of cost with the rate dropping to 10.49% at 2% origination, or the Financed Interest Reserve goes to about 90% of the lot and build in cash (95% with the interest reserve included) at 9.50%, with 3% origination plus lender fees. At 5+ builds Lower Fees reaches 90% of cost at 9.99%, and that is still not 10% cash: on our $540,000 Houston build at 5+ builds you still need $79,762 at closing and $162,538 in the bank.

Capital Kings LLC is a broker, not a lender: we shop each Houston build across 400+ lenders and send the term sheet with every fee on it.

The terms

Houston construction terms, as of October 2026

LTC	85% first build, 85% at 1-4 builds, 90% at 5+Of lot plus build. Up to 95% with the Financed Interest Reserve counted in the loan
Completed value (LTARV)	65% / 70% / 75% of the after-completion appraisalThe lower of this and LTC sets the loan
Rate	11.49% / 10.49% / 9.99%, interest-onlyOn drawn funds. 9.50% (first build and 1-4) and 8.49% (5+) with the Financed Interest Reserve
Origination	2% on Lower Fees, 3% with the reserveThe reserve structure adds $1,995 underwriting and $1,495 processing. $2,000 minimum origination.
Broker fee	1%, $2,000 minimumThe only money Capital Kings earns, its own line on the term sheet
Term	12-18 monthsPaid off by a sale or a DSCR refinance
Construction draws	The budget is released per completed, inspected phaseInterest only on what has been drawn
Lot advance	70% / 75% / 80% of the lot price at closingThe rest of the lot is your down payment
Cash needed	19.6% / 19.6% / 14.8% of cost at closing on our exampleProof of funds 35.3% / 34.9% / 30.1%: about 15% of the budget to start plus six months of interest
Minimum credit	650 on Lower Fees, 680 on the Financed Interest Reserve
Experience	First build with a general contractor with 5 or more completed buildsYou can be your own GC once you have finished one build
Close time	21-30 daysPlans, budget and the GC package in

First build / 1-4 builds / 5+ builds. These are the tiers the instant term sheet uses as of October 2026; we shop every build against the whole network before you sign.

Worked example

A $540,000 Houston build, and the cash it really takes

An illustration, not a closed loan: a teardown lot in Oak Forest at $150,000, a 2,400 square foot house built for $390,000 (NAHB’s national average of about $162 a square foot), and a $720,000 completed value, at 730 credit. The loan numbers are what the instant term sheet prints at each tier.

90% LTC does not mean only 10% cash. Here is why.

Lot + build$540,000$150,000 lot, $390,000 build, 5+ builds

Loan, 90% of cost$486,000Lot advance $96,000, build $390,000 in draws

Lot down payment$54,000The lot is funded only up to the lot advance; the loan cap leaves the rest on you

Closing costs$25,762Origination, broker fee, title, builder’s risk insurance, prepaid interest, appraisal

Cash to close$79,76214.8% of lot + build

Cash cushion (6 months of interest + build kickoff)$82,776About 15% of the budget plus six months of interest, verified in your account

Proof of funds$162,53830.1% of lot + build

The same Houston build at each tier, on Lower Fees

Builds completed	LTC	Loan	Rate	Lot down	Cash to close	Proof of funds
GC-backed first build	85%	$459,000	11.49%	$81,000	$105,990	$190,860
1-4 builds	85%	$459,000	10.49%	$81,000	$105,802	$188,377
5+ builds	90%	$486,000	9.99%	$54,000	$79,762	$162,538

The term sheet

Every fee, at every tier

The Lower Fees term sheet the application builds for this lot and build at each tier, with every fee and who gets paid. The Financed Interest Reserve is priced side by side below.

Cash to close$105,990

Proof of funds to show$190,860

Where the $105,990 goes

Land down paymentEquity$81,000
Appraisal feeAppraiser$550
Prepaid interestLender$2,167
Lender origination feeLender$9,180
Broker feeBroker$4,590
Closing / titleTitle co$4,603
Builder’s risk insuranceInsurer$3,900

Proof of funds adds $58,500 to start the build and $26,370 of interest, which stay in your account.

Sample sheets, fictional borrower and lot, same engine that builds yours. Yours takes about two minutes and doesn’t pull your credit.

By builds completed

Two ways to structure it

With 5 or more completed builds you have two options: Lower Fees goes to 90% of cost with the rate dropping to 9.99% at 2% origination, or the Financed Interest Reserve goes to about 91% of the lot and build in cash (95% with the interest reserve included) at 8.49%, with 3% origination plus lender fees.

5+ builds

Lower Fees9.99%2% origination

90% of lot + build in cash

Financed Interest Reserve8.49%3% origination + $3,490 lender fees

91% of lot + build in cash + $21,777 reserve

Loan to cost

90%$486,000 on this build

95% with the reserveAbout 91% in cash, $513,000 here

Completed-value cap

75%

75%Reserve included

Lot at closing

Up to 80%$96,000 here

Up to 75%60% before permits, $112,500 here

Origination and lender fees

2% origination$9,720 on this build

3% origination + $3,490$18,880 on this build

Interest while you build

You pay monthly$799 at first, $4,046 fully drawn

$21,777 reserve pays it6 months of fully drawn interest, in the loan

Cash to close

$79,762Lot down plus closing costs

$71,158Plus $11,277 of the build before the first draw

Proof of funds

$162,53815% of the budget and 6 months of interest on top

$71,158What the lender checks. The $11,277 of the build is yours on top, as it goes up

Minimum credit

650+

680+

Fits you if

You want the lowest feesYou make the interest payments as you build

You want the payments coveredThe reserve pays the interest first, for higher fees

On this build the Financed Interest Reserve takes $8,604 less cash to close but leaves $11,277 more of the build to you before the first draw, needs $91,380 less proof of funds, and costs $9,160 more in origination and lender fees at closing.

Both columns run this page’s worked example ($150,000 lot, $390,000 build, $720,000 finished value, 730 credit), priced the same way as your term sheet, as of October 2026. Where a structure leaves part of the build to you, that amount sits under its cash to close. We price your build on both and you pick.

Finished one build in your LLC?

See the second-build program with the financed interest reserve, worked example included →

Before you start

Your first build, and your lot

First build? Bring the GC.

A first Houston build gets 85% of cost when a general contractor with 5 or more completed builds signs the construction contract and builds it. Owner-as-GC on build one is where these files die. Once you have finished one, your own company can take over. In Houston that GC is usually a local spec builder with a track record inside the Loop.

Close the lot with the loan

If you can, put the lot under contract with an option period and a financing contingency, get pre-approved, and close the lot and the construction loan together. The lot advance is financed, so the loan is larger, and you pay closing costs once instead of twice. A lot you already own still counts as equity if that is how the deal comes.

Run the numbers

Size your Houston build

Prefilled with the Houston example above, set to 5+ builds. Drag any number or switch the tier and structure.

Sizing your build on the same terms as the application. Get my term sheet →

Houston notes

Building in Houston

Redfin puts the Houston median sale price at $342K for the three months ending September 2026, down 2.3% on a year earlier, at $171 a square foot. That median is mostly older stock; a new build has to appraise well above it to clear the completed-value cap, which is why infill inside and just outside the Loop is where ground-up pencils.

The lot

Houston has no zoning, but many neighborhoods carry deed restrictions on lot size, setbacks and the number of units, and the city’s Chapter 19 floodplain rules set the finished floor height in mapped flood areas. Pull the restrictions and the flood map before you go under contract on the lot.

The build

A two-story spec on a narrow infill lot is the common Houston build. The lender wants an itemized budget with a draw schedule, the plans and specs for the appraiser, and builder’s risk insurance in place at closing.

New construction loans across Texas →Hard money and flip loans in Houston →DSCR loans in Houston for the refinance →Every Texas program →

Local figures: Redfin, Houston housing market, Oct 19, 2026 · NAHB, Cost of Constructing a Home 2024 (about $162 per square foot), Jan 20, 2025 · NAHB Eye on Housing, lot values for homes started in 2025, Jul 28, 2026.

Questions

Houston construction loan FAQ

What are new construction loan rates in Houston, TX?

As of October 2026: 11.49% on a GC-backed first build, 10.49% at 1-4 finished builds and 9.99% at 5+, interest-only on drawn funds with 2% origination. With the Financed Interest Reserve, which makes the payments while you build: 9.50% for a GC-backed first build or 1-4 builds and 8.49% at 5+, 3% origination plus lender fees, 680+ credit. Our 1% broker fee ($2,000 minimum) is on top.

How much of the project does a Houston construction loan cover?

On Lower Fees, 85% of lot plus build on a first build, 85% at 1-4 finished builds and 90% at 5+, capped at 65%, 70% and 75% of the completed value. The lot is funded up to 70% to 80% of its price at closing and the budget follows in draws. After one completed build you have two options: Lower Fees stays at 85% of cost with the rate dropping to 10.49% at 2% origination, or the Financed Interest Reserve goes to about 90% of the lot and build in cash (95% with the interest reserve included) at 9.50%, with 3% origination plus lender fees.

Does 90% LTC mean I only need 10% cash?

No. On our $150,000 lot and $390,000 build at 5+ builds the loan is $486,000, but the lot down payment is $54,000, closing costs add $25,762, so cash to close is $79,762 (14.8% of cost). The lender also verifies about 15% of the budget and six months of interest, so proof of funds is $162,538.

Can a first-time builder get a construction loan in Houston?

Yes, when a general contractor with 5 or more completed builds builds it. A GC-backed first build gets 85% of cost, up to 65% of completed value, at 11.49%. On our example that is $105,990 cash to close and $190,860 proof of funds. Being your own GC waits until you have finished one build.

Should I buy the lot first or close it with the construction loan?

Close them together when you can. Put the lot under contract with an option period and a financing contingency, get pre-approved, and close the lot and the construction loan at once: the lot advance is financed and you pay one set of closing costs. A lot you already own counts as equity, so it still works if the lot would be lost otherwise.

How do construction draws work in Houston?

The budget is not wired at closing. You complete a phase, the inspector confirms it, and the lender releases that part of the budget. Interest is charged only on what has been drawn, so the payment starts small and grows with the build.

What credit score do I need for new construction in Houston?

650 or higher on Lower Fees and 680 or higher for the Financed Interest Reserve. Experience sets the leverage more than the score does.

How long does a Houston construction loan take to close?

21-30 days is typical once plans, the itemized budget and the GC package are in, since the appraiser values the finished house from the plans. The loan runs 12-18 months interest-only.

Does Houston’s lack of zoning make a construction loan easier?

It removes the rezoning step, not the review. Deed restrictions still control what you can build on many Houston lots, and the lender’s appraiser values the house you are actually allowed to build. Send the restrictions with the plans.

Do flood rules change a Houston construction loan?

They can change the budget. In a mapped floodplain the house has to be built above the base flood elevation, which can add fill or a raised slab, and the flood insurance quote becomes part of the file. Price both before you lock the lot.

Who you’re working with

Founder & CEO

Micah Foster

Micah brokers new construction, hard money and DSCR loans for real estate investors and builders across 37 states. He founded Capital Kings LLC to give builders a broker who shops the market on their behalf instead of pitching one lender product, and every term sheet he sends is itemized down to the last fee.

Send Micah your build →

Keep reading

Before you break ground

Ready to price your Houston build?

Two minutes to an instant construction term sheet. No credit pull, every fee on the page, draws that follow the build.

Get my construction terms →Call (281) 636-5682 Text Micah