Housing First Minnesota's Parade of Homes is the perfect place for Minnesotans to dream big — touring stunning townhomes, luxury single-family residences, and remodel ideas across the metro. Once you’ve found the perfect plan, the most common question we hear is: “How does construction loan financing actually work in Minnesota, and how can I make my dream a reality?”
At Security Bank & Trust Co., we specialize in Minnesota construction loans and jumbo construction projects. Unlike big national lenders, we’re a local, independent community bank that understands Twin Cities-area permitting, harsh winter build schedules, frost footings, and working with Housing First Minnesota builders.
What Is a Construction Loan & How Does It Work in Minnesota?
A construction loan in Minnesota is a short-term line of credit that funds your new home build, then typically converts (or refinances) into a permanent mortgage once your certificate of occupancy is issued.
Key features of our Minnesota construction loans:
- Interest-only payments during the build phase — you only pay interest on the money actually drawn
- Construction-to-permanent options available
- Fixed or adjustable rates (generally competitive with or better than national lenders)
- Terms usually 9–18 months, depending on project size and complexity
- Local draw inspections and disbursements handled quickly through Minnesota title companies
- We monitor the process closely to help prevent mechanic’s liens
Minnesota Construction Loan Requirements & What to Expect
We keep the process transparent and straightforward so you can focus on the excitement of building. Here’s what we’ll need to get you pre-approved fast (often in 24–48 hours):
- Personal financial statement or balance sheet with verification of assets/liabilities
- Income verification (W-2s, tax returns, recent pay stubs)
- Purchased lot or land under contract
- Complete house plans/specifications and signed contract with a reputable Minnesota builder
- Your cash equity/down payment into the project (typically 10–20% depending on credit, project, and appraisal)
- Your “exit strategy” — stay with us for the permanent mortgage (portfolio options available) or refinance elsewhere
Our experienced lenders Mary Stoltenburg and Judy Meyer have been originating construction and permanent mortgages in the Minneapolis/St. Paul metro for many years. Mary, Judy, and our team know the local builders, appraisers, and inspectors which gives you certainty and speed that out-of-state lenders simply can’t match.
Why Choose Security Bank & Trust Co. for Your Minnesota Construction Loan?
- Local decisions, local servicing — no 800-numbers or automated systems it's why we've often been ranked as one of Minnesota's Best Banks
- Competitive rates and flexible terms on loans from $300,000 to multi-million-dollar luxury or lake homes
- We finance projects with many Housing First Minnesota builders
- 21 Branches conveniently located in Brownton, Cambridge, Chaska, Cologne, Eden Prairie, Glencoe, Hamburg, Isanti, Mayer, Minnetonka, New Auburn, New Germany, North Oaks, Plato, Ramsey, Waconia, Wayzata, Winsted, and service the Twin Cities Metro Area
- Portfolio lending capabilities — we hold many loans in-house for added flexibility
Ready to Build in the Twin Cities or Greater Minnesota?
Contact Mary, Judy, or one of our lenders today for a no-obligation loan discussion by filling out our New Construction Loan form.
