Financing Your Custom Home

One of the most common questions we hear is "How do I pay for a custom home while it's being built?" Financing new construction works a little differently than buying an existing house — but once you understand the basics, it's straightforward. Here's how it works, and how Alethium Star Homes supports you through it.

A quick note up front

Alethium Star Homes is your builder, not your lender. You'll secure your financing through a bank, credit union, or mortgage lender. What we do is make that process easy: we provide the detailed plans, specifications, budget, and draw schedule your lender needs, and we coordinate with them throughout the build. We're also glad to refer you to experienced local lenders who finance custom construction in Bell County.

How construction financing works

Because your home doesn't exist yet, you can't simply get a traditional mortgage on day one. Instead, most of our clients use a construction loan that converts into a permanent home loan once the house is finished. There are two common structures:

Construction-to-permanent (single-close)

The most popular option. You close one loan that covers the construction phase and then automatically converts to your permanent mortgage when the home is complete.

• One closing, one set of closing costs.
• During construction you typically make interest-only payments on the money that's been drawn so far — not the full loan amount.
• When the home is finished, the loan rolls into a standard long-term mortgage (for example, a 15- or 30-year loan).

Two-close (construction loan, then refinance)

You take out a short-term construction loan to build, then refinance into a separate permanent mortgage at completion. This means two closings, but it can offer more flexibility on your final mortgage terms.

How the money gets paid out: "draws"

You don't receive the full loan amount up front. Instead, the lender releases funds in stages called draws, tied to construction milestones — for example, after the foundation, framing, mechanicals, and final finish-out. The lender (often with an inspection) confirms each stage is complete before releasing that draw directly toward the build. This protects both you and the lender, and it's why a clear budget and draw schedule — which we provide — matter so much.

What lenders typically look for

Every lender is different, but for a custom construction loan you can generally expect them to consider:

• Your credit and income — the same fundamentals as any mortgage.
• A down payment — construction loans often require a larger down payment than a standard purchase; your lender will confirm the exact figure.
• Your lot — land you already own can sometimes count toward your equity or down payment.
• The builder's plans, specs & budget — which we supply, along with our contract and draw schedule.
• An appraisal — based on the plans and specifications, projecting the finished home's value.

Getting started is simple

1. Get pre-qualified. Talk to a lender early to understand your budget and what you can borrow. Need a recommendation? Ask us.
2. Lock in your plan & budget. We'll help you finalize a plan and a detailed, transparent budget — the numbers your lender needs. (See our building process.)
3. Close your loan and break ground. Once financing is in place, we start building.

Let's talk

Every situation is different, and the best first step is a conversation. We'll help you understand your options and connect you with lenders who know custom construction in Central Texas.

This page is general information, not financial or lending advice. Loan programs, rates, terms, and requirements vary by lender and by your individual situation. Alethium Star Homes does not provide financing; please consult a licensed lender for details specific to you.