“Depending on which product they’re in, for example, an FHA construction loan, the borrower makes no payments while the house is being built,” Eldridge said. “So it’s six, nine, or 12 months of them not making a payment. With conventional, they’re making interest-only payments.
“FHA is 3.5% down on a new construction. On a VA loan, we’ll do 100% on a brand-new house, dirt-up construction. And they could come in with $0 out of their pocket and build a home from scratch. Same thing with USDA.”
Dave Krueger, a mortgage broker at Montana Family Mortgage, describes the situation as “very difficult” for new buyers, with many being “pushed out of the market.” https://t.co/c4xkwnCLUm
— Mortgage Professional America Magazine (@MPAMagazineUS) July 26, 2025
Eldridge noted that these construction loans are an excellent way for his company to differentiate itself from other lenders. Similarly, being able to offer these loans gives mortgage brokers a competitive edge over other loan officers in their area.
“That’s a great opportunity for that loan officer to find that out, to learn the program and promote that you know what they can do,” he said. “Loan Officers have to differentiate themselves with different things they can do well because everybody can do a vanilla loan. I always say, ‘I love doing the challenging loans, because everybody can do the vanilla stuff.’
“But when you get dealt the hard loan, do you want to take the time to figure it out? When there are lots of borrowers running around, people cherry-pick. But then what happens when it’s not that environment? I think the loan officers who take the time to work those deals, regardless of where the cycle is, are the ones who can thrive in any environment.”