Most construction loan issues don’t happen mid-build. They happen before construction ever starts. Here are the most common reasons construction loans fail — and how to avoid them.

1. Incomplete Builder Documentation
   Missing licenses, insurance, or vague contracts can derail approval quickly.
   
   
2. Unrealistic Budgets
   Appraisers rely on plans and specs. If costs aren’t realistic, the value won’t support the loan.
   
   
3. Borrower Qualification Changes
   Because construction loans are underwritten upfront, job changes, new debt, or credit hits can cause problems later.
   
   
4. Poor Draw Planning
   If draw schedules aren’t aligned with real construction timelines, cash flow issues arise
   

How to Avoid These Issues

• Involve your lender early
• Use experienced builders
• Lock down plans, specs, and budgets
• Don't treat construction financing like a standard mortgage

Bottom Line

Construction loans succeed when they’re structured properly from day one. The goal isn’t just approval—it’s a smooth build.

Call (336) 575-9448 to get started today.