How to Finance a Custom Build in St. George or Ivins

Dreaming of a custom home set against Southern Utah’s red rock views, but unsure how to fund it? You’re not alone. Financing a ground‑up build in St. George or Ivins has more moving parts than a typical purchase, and a smart plan will save you time, stress, and money. In this guide, you’ll learn your loan options, what lenders expect, local fees to plan for, and a simple step‑by‑step path to approval. Let’s dive in.

Your main financing paths

Construction‑to‑permanent (one‑time close)

A single loan funds construction, then converts to your long‑term mortgage when the home is finished, usually without re‑qualifying. Programs exist in both conventional and government‑backed versions. You get one closing and often the ability to lock your permanent rate up front. Availability and builder documentation rules vary by lender. Learn how construction loans work from the Consumer Financial Protection Bureau.

Two‑loan approach

You take a short‑term, interest‑only construction loan, then refinance into a standard mortgage at completion. This path can offer flexible underwriting with some lenders, but you face two closings, potential re‑qualification, and rate risk between start and finish. The CFPB explains typical draw schedules and short‑term costs.

Government‑backed options

• VA one‑time close can finance land plus construction for eligible veterans, often with 0 percent down, subject to program rules and builder documentation. See VA’s guidance on building with a VA loan in this VA News overview.
• FHA one‑time close supports owner‑occupied single‑unit homes, with FHA loan limits and property standards. Review the basics of FHA’s one‑time‑close option.
• USDA can be 0 percent down if the property is in an eligible rural area. Parts of St. George are often ineligible while nearby areas may qualify. Always check the specific lot on the USDA eligibility map.

What lenders look for

Down payment, credit, and reserves

Down payment needs vary by program. VA and USDA can offer 0 percent down for eligible borrowers, FHA typically requires 3.5 percent, and conventional construction loans often expect more equity. Stronger credit, manageable debt‑to‑income, and cash reserves help. Get grounded on down payment expectations with this CFPB guide.

Draws, inspections, and interest during build

Lenders fund construction in stages, called draws, that match milestones like foundation, framing, and finishes. Inspections verify progress before each draw, and many loans are interest‑only on the amount disbursed during construction. The CFPB’s construction‑loan overview covers these mechanics.

Rates, fees, and mortgage insurance

Construction‑phase rates are commonly higher than permanent rates. One‑time‑close programs may lock your permanent rate at origination or offer a lock with a float‑down option, depending on the lender. Closing costs, impact and permit fees, and program charges apply, and FHA loans include mortgage insurance requirements. See CFPB’s notes on disclosures and rate‑lock timing in its Know Before You Owe update.

Local factors in St. George and Ivins

Permits, water, septic, and impact fees

Washington County and cities like Ivins administer permits, plan reviews, and impact fees that affect your budget and timeline. New single‑family builds may require proof of water service, septic approvals for certain areas, energy‑code documentation, geotechnical data, and fee payments. Review county submittal checklists and fee references on the Washington County building permit page.

Market and appraisal context

Appraisers and lenders compare total project cost to the appraised value at completion. Local sale comps shape that value, so budget with current pricing in mind. For a quick snapshot, see recent trends on Redfin’s St. George market page.

Cost trends and contingency

Construction costs have risen in recent years, and Western markets often run higher than national medians. A contingency of 5 to 10 percent is a common best practice in custom builds. For national cost insights and components, see NAHB’s latest Cost of Construction Survey.

Build budget at a glance

Create a clear line‑item budget that your lender and appraiser can review:

• Land or lot value and site work
• Hard costs, including foundation, framing, systems, and finishes
• Soft costs, including design, engineering, permits, and utility hookups
• Builder fee and overhead
• Impact and connection fees
• Contingency, typically 5 to 10 percent

For a visual breakdown of typical components, review this analysis of what goes into a new home’s price from Visual Capitalist.

One‑time close vs two‑loan: how it feels in practice

• One‑time close: One approval and one closing, construction interest during the build, then automatic conversion to your long‑term mortgage. You often lock your permanent rate upfront and avoid a second set of closing costs.
• Two‑loan path: You close on a standalone construction loan, make interest‑only payments during the build, then apply for a permanent mortgage at completion. You may face re‑qualification, a second appraisal, two sets of closing costs, and rate exposure while you build.

Step‑by‑step plan to fund your Southern Utah build

1. Get pre‑qualified with a lender that regularly does construction and one‑time‑close loans. Ask about draw schedules, rate locks, and documentation. The CFPB’s primer on construction loans lists smart questions to ask.
2. If you plan to use USDA, confirm the exact lot on the USDA eligibility lookup.
3. If you are a first‑time buyer, check Utah’s program for new construction assistance, including price caps and availability, on the Utah Senate program page.
4. Select a licensed builder and finalize a fixed‑price or guaranteed‑maximum‑price contract with detailed specs, allowances, and a clear change‑order process.
5. Assemble your lender package: income documents, assets, plans and specs, signed contract, cost breakdown, proposed draw schedule, and any required site reports.
6. Submit permits early through Washington County or your city and plan cash flow for impact and connection fees. See county requirements on the permit documents page.
7. During construction, track draws, inspections, lien waivers, and interest‑only payments. Confirm in writing how and when your permanent rate is set.

First‑time buyer help for new construction

Utah’s First‑Time Homebuyer Assistance Program can provide up to $20,000 in assistance for eligible first‑time buyers purchasing newly constructed, never‑occupied homes, subject to price caps and program rules. Availability and limits can change, so review current details on the Utah Senate program page.

Build with confidence

Financing a custom home in St. George or Ivins comes down to the right loan structure, a complete budget, and early coordination with your lender and builder. With a clear plan and the right team, you can protect your budget, your timeline, and your peace of mind.

If you want a local strategy session tailored to your lot, goals, and budget, connect with Utah's Finest Realtors for white‑glove guidance from land search to closing.

FAQs

What is a construction‑to‑permanent loan for a custom home in St. George?

• It is a single loan that funds construction, then converts to a long‑term mortgage at completion, often with one closing and a potential upfront rate lock as outlined by the CFPB.

How much cash should you budget upfront for a Southern Utah build?

• Plan for down payment or equity based on program, closing costs, permits and impact fees, and a 5 to 10 percent contingency, with down payment ranges explained in the CFPB guide.

Can eligible veterans use a VA loan to build in Ivins or St. George?

• Yes, VA‑guaranteed construction‑to‑permanent options exist and can include land plus build with 0 percent down for eligible borrowers, subject to documentation and builder requirements per VA guidance.

Are USDA loans available for building in Washington County?

• Some outlying areas may qualify while many St. George addresses do not, so you must verify the exact lot on the USDA eligibility map.

What local permits and fees should you expect in Washington County?

• Expect plan review, proof of water or septic approvals where needed, energy‑code documents, geotechnical reports, and impact fees, as listed on the county’s permit documents page.