Capital Kings LLC

New Construction Loans in Texas.The lot and the build, one loan.

Sized on total project cost and on the completed value: the lot advance funds at closing and the construction budget follows the build in inspected draws. First-time builders qualify at 85% of total project cost, and the leverage and the rate move at your first completed build and again at five. We’re a broker, not a lender, so we shop your file across 400+ lenders and price it on a term sheet you can actually read.

Get a construction term sheet →Run the build math

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

Reviewed by Micah Foster, Founder & CEO · September 2026

How is a construction loan sized?

$55,000 lot advance +$200,000 build =$255,000 loan

The lowest of three caps on a first build: 85% of the $300,000 lot and build ($255,000), 65% of the $420,000 completed value ($273,000), and the lot advance plus the build.

You bring $60,568 at closing, including the $45,000 left on the lot, and show $106,174 in the bank with the build kickoff and six months of interest. No tax returns, W-2s or a debt-to-income ratio.

The lot advance is up to 70% of the lot price at closing; the rest of the lot is your down payment. On a lot you already own, the as-is value counts as your equity. The construction budget follows the build in inspected draws, and interest is charged only on what has been drawn.

One example build, priced the way the application prices it

An example build: a $100,000 lot, a $200,000 construction budget, a $420,000 completed value, 730 credit, first build. Total project cost $300,000.

Loan (85% of cost)$255,000

Rate, interest-only12.24%

Lot down payment$45,000

Cash to close$60,568

Loan-to-completed-value 60.7%, under the 65% cap. Lot advance $55,000 at closing, $200,000 of construction funded in draws. Interest-only $561 a month on the lot advance, $2,601 when fully drawn. Proof of funds $106,174 including the kickoff and six months of interest. Priced the way the instant term sheet prices it, as of October 2026; we re-price every file against the full network before you sign.

Two ways to structure it, by builds completed

Financed interest reserve: your first months of interest are financed as part of the loan rather than paid out of pocket.

On a first build, with a general contractor who has 5 or more completed builds, you have two options: Lower Fees at 85% of cost and 11.74% (12.24% below a 740 score) at 2% origination, or the Financed Interest Reserve at about 86% of the lot and build in cash (90% with the interest reserve included) at 9.50%, with 3% origination plus lender fees.

First build

Lower Fees12.24%2% origination

85% of lot + build in cash

Financed Interest Reserve9.50%3% origination + $3,490 lender fees

85.7% of lot + build in cash + $12,825 reserve

Loan to cost

85%$255,000 on this build

90% with the reserveAbout 86% in cash, $270,000 loan with the reserve in it

Completed-value cap

65%

70%Reserve included

Lot at closing

Up to 70%$55,000 here

Up to 70%60% before permits, $70,000 here

Origination and lender fees

2% origination$7,095 on this build

3% origination + $3,490$11,590 on this build

Interest while you build

You pay monthly$561 at first, $2,601 fully drawn

$12,825 reserve pays it6 months of fully drawn interest, in the loan

Cash to close

$60,568Lot down plus closing costs

$50,283Plus $12,825 of the build before the first draw

Proof of funds

$106,17415% of the budget and 6 months of interest on top

$63,108Your cash to close plus the $12,825 of the build you pay

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 $10,285 less cash to close but leaves $12,825 more of the build to you before the first draw, needs $43,066 less proof of funds, and costs $4,495 more in origination and lender fees at closing.

Both columns run this page’s worked example ($100,000 lot, $200,000 build, $420,000 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.

Broker fee	1% of the loan, $2,000 minimum (a reduced rate at $500K+, $10,000 maximum)
Origination floor	$2,000 minimum
Term	12-18 months, interest-only on the drawn balance
Draws	Released per completed, inspected phase
Builder’s risk insurance	About 0.75% of the budget in Texas, more on the coast, $750 minimum, est.

These are the tiers the instant term sheet uses, as of October 2026. We shop every construction file against the whole network before it’s signed, and your term sheet shows the exact figure.

Finished one build in your LLC?

Bring less cash to your second ground-up build: about 90% of the lot and build in cash with the Financed Interest Reserve (95% with the reserve included). See a worked example →

Have a deal in mind?Get a construction term sheet Text Micah

Size your build before you buy the lot

Prefilled with the example build above. Drag any number; it re-sizes on the application’s terms.

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

Can I build my first house with a construction loan?

Most people planning a first build assume a lender wants a portfolio of finished houses before it will fund one. It doesn’t. What it wants is a general contractor with 5 or more completed builds running yours. On a first build the loan is sized at 85% of the total project cost, capped at 65% of what the house will appraise for when it’s done, and the rest is on you: the remaining lot money at closing, the closing costs, and a verified cushion to get the build started. Finish one project and you have two options on the same deal: Lower Fees at 85% of cost and 70% of value at 10.49%, or the Financed Interest Reserve at about 90% of the lot and build in cash (95% with the reserve included) at 9.50%.

Credit650 and up

The instant term sheet prices new construction from 650, or 680 with the Financed Interest Reserve. The tier, not the score, sets the leverage: the example build above is a 730 first-time builder.

Cash15% of cost plus costs

On a first build you bring 15% of lot plus budget, paid toward the lot at closing, plus closing costs and the cash cushion below. After one finished build it stays at 15% on Lower Fees, or drops to about 10% in cash with the Financed Interest Reserve.

The projectLot + build, capped on value

The loan is the lowest of 85% of total cost, 65% of the completed appraisal, and the lot advance plus the budget. Run all three before you go under contract on the lot.

ExperienceFirst build OK with a GC

You don’t need a finished build to get approved. You need a general contractor with 5 or more completed builds. If you were planning to build it yourself, bring in an experienced GC for the first one.

The real term sheet for the example build

This is the term sheet the application generates for a $100,000 lot, a $200,000 build and a $420,000 completed value at 730 credit. Every fee is on it, and every line says who gets paid: your equity, the lender, the title company, the insurer, the appraiser, or the broker. Switch to After one build to see the same deal once you have finished a project.

Cash to close$60,568

Proof of funds to show$106,174

Where the $60,568 goes

Land down paymentEquity$45,000
Appraisal feeAppraiser$550
Prepaid interestLender$277
Lender origination and feesLender$7,095
Broker feeBroker$2,550
Closing / titleTitle co$3,596
Builder’s risk insurance (estimate)Insurer$1,500

The gold broker line is the only money Capital Kings earns. Proof of funds adds $30,000 to start the build and $15,606 of interest reserves, and that money stays in your account.

These are sample sheets for a made-up borrower and lot, built by the same engine that builds yours. Yours takes about five minutes and doesn’t pull your credit.

Five mistakes first-time builders make

Going under contract on the lot before the caps are run. The completed-value appraisal caps a first build at 65%. A $420,000 finished house caps the loan at $273,000, so the lot and the budget have to fit under it before you commit.
Treating the draws like a checking account. You fund each phase, the inspection releases it. That’s why the lender verifies a 15% kickoff cushion and why a lump-sum budget gets sent back. Itemize it by phase.
Counting lot equity you don’t have yet. A lot you own outright is equity and the loan can fund the build with little cash at closing. A lot you’re buying is funded only up to the lot advance; the rest is your down payment.
Planning to be your own GC on your first build. Lenders that approve first-time builders want a general contractor with 5 or more completed builds. Once you’ve finished one build, your own company can take over.
Skipping the builder paperwork. The construction contract, the contractor’s insurance and the permits are what let the lender approve the builder, count your experience and release draws on time. Have them ready before the appraisal is ordered.

Watch Micah walk through a buildHow much cash do you actually need for your first new construction project? · 2 min

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Send Micah your build →Size the build first

What documents does the lender need?

Lot contract, or the deed and an as-is value if you own it.
Plans and specs, and where the permit stands.
Itemized construction budget with a draw schedule, not a lump sum.
General contractor resume, insurance certificate and the construction contract.
Builder’s risk insurance quote.
LLC certificate of formation, EIN letter, operating agreement and ID.
Two months of bank statements showing the reserves.
Closing statements or permits on completed builds, if you have them. They move your tier.

Not on the list: tax returns, W-2s, pay stubs, or an employment verification.

Which loan does your project need?

New construction

Fix and flip

Sized on

Total project cost and completed value

Purchase price, rehab budget and ARV

Funds

Up to 70% to 80% of the lot at closing, the build in draws

Most of the purchase, up to 100% of the rehab in draws

Term

12-18 months, interest-only

12 months, interest-only

Rate

From 10.5%, or 8.49% with a financed interest reserve at 5+ builds

From 8.99%

Experience

First build OK with a GC with 5+ completed builds, leverage by tier

First deal welcome, leverage by tier

Best for

Building from the dirt up

Renovating a house that exists

Where does ground-up pencil in Texas?

Ground-up pencils where the finished house sells for well above lot plus build: Houston infill inside and just outside the loop, the near-north and east side, DFW suburbs where teardowns clear, San Antonio’s north side and the Austin metro outside the core. The completed-value cap is the number to watch. A 65% first-build cap on a $420,000 appraisal is $273,000, so the lot and the budget have to fit under it. We size all three caps before you go under contract on the lot.

Dallas investor loans →Houston investor loans →Arlington →Austin →Corpus Christi →Cypress →El Paso →Fort Worth →Frisco →Katy →Lubbock →McKinney →Plano →San Antonio →Spring →The Woodlands →All Texas coverage →

How long does it take to close?

Send the project in about five minutes with no credit pull, we shop it to the ground-up lenders that fit your tier, and the appraisal, budget and GC review run while builder’s risk binds. Closing takes 21-30 days typical once the file is complete. The lot advance funds at the table and draws follow each inspected phase, with interest only on the drawn balance.

Texas construction loan FAQ

What is a new construction loan for investors?

A short-term loan that funds a ground-up build: part of the lot at closing and the construction budget in draws as the work passes inspection. It’s sized on total project cost (lot plus budget) and on the completed value from an after-completion appraisal, runs 12-18 months interest-only, and is paid off when the house sells or refinances into a long-term loan. Capital Kings LLC brokers these for investors and builders across Texas.

How much money do I need for my first new construction project?

About 15% of the total project cost, plus closing costs, plus reserves. On a $100,000 lot with a $200,000 budget that’s $45,000 toward the lot at closing and $60,568 cash to close once origination and the lender’s fee, the broker fee, title, builder’s risk insurance, prepaid interest and the appraisal are in. The lender also verifies about 15% of the budget and six months of interest on top, so proof of funds on that deal is about $106,174.

Can a first-time investor get a construction loan?

Yes, as long as an experienced builder is on the job. You don’t need finished houses of your own, but the lender wants a general contractor with 5 or more completed builds to sign the construction contract with you. You can be your own GC once you’ve finished one build. On a first build the loan covers 85% of the total project cost, up to 65% of what the house appraises for when it’s done, and 70% of the lot price if you’re buying the lot, at 11.74% on the instant term sheet with 740+ credit (12.24% under 740), plus the lender’s $1,995 closing fee. You’ll also need a real budget, the appraisal and money in the bank. 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. The reserve makes the payments while you build and needs 680+ credit, and it is open on a first build too when your GC has 5+ completed builds.

Do I need a general contractor, and can it be me?

On your first build it has to be a general contractor with 5 or more completed builds. After you finish one build, it can be you. Every ground-up lender vets the builder: a resume of past projects, proof of insurance and references. If you’re a licensed contractor, about half of the new construction lenders in the network count builds you managed as experience, with permits pulled under your license or signed contracts as proof, which can move you out of the first-build tier.

How do construction draws work?

The construction budget isn’t wired at closing. It’s released in draws as phases are completed and inspected: you fund the phase, the inspector confirms it, the lender reimburses that line of the budget. That’s why the lender verifies a kickoff cushion of about 15% of the budget before closing. Interest is charged only on what has been drawn, so the payment starts small and grows with the build.

Can I use a lot I already own?

Yes, and it helps. An owned lot’s as-is value is part of the cost basis and counts as your equity, so the loan can fund the build with little or no cash at closing. You can also ask for cash against the lot, capped at the lot advance percentage for your tier. If you’re buying the lot, the lender funds up to 70% of the lot price on a first build and you bring the rest.

What credit score do I need for a new construction loan?

650 or higher on the Lower Fees structure, and 680 or higher for the Financed Interest Reserve. On new construction, experience sets the leverage more than the score does: a 730 first-time builder and a 780 first-time builder both price in the first-build tier. Below 650, we price the file by hand against the full network before anything is signed.

How long does a construction loan take to close, and how long do I have to build?

21-30 days is typical once the file is complete: the appraiser needs plans and specs to set the completed value, the budget and the GC get reviewed, and builder’s risk insurance has to bind. The loan runs 12-18 months, which covers most single-family builds in Texas with room for permitting. Extensions exist if the build runs long, and the exit is a sale or a DSCR refinance once it’s rented.

Which Texas cities have their own page?

Which questions have worked examples?

Founder & CEO

Micah Foster

Micah brokers new construction, hard money and DSCR loans for real estate investors across 38 states, with most of his volume in Texas. 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 →

Before you break ground

Ready to price your Texas build?

About five 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