Already own your lot in Texas? Finance just the construction on land you already hold — and let your lot equity count toward the down payment. Often the most cost-efficient path to a custom home, with the lowest cash needed at closing. Existing liens on the lot can be paid off and rolled into the build.
If you already own your land in Texas — whether you paid cash for it, inherited it, or have an existing lot loan — Build on Owned Land construction financing covers just the construction portion. Your lot's equity counts toward the down payment, which often means you can break ground with very little cash out of pocket. This is the most cost-efficient path to a custom home for anyone who's already secured their lot.
If you bought a $80,000 lot a few years ago and it's now worth $120,000, that's $120,000 in equity working as your down payment on the build. On many files this entirely covers the down payment requirement — meaning you can build a home with essentially no cash to close.
Works the same — the equity is yours and counts toward the down payment. Lots passed down from family are a common path to homeownership in Texas; this product is built for it.
The lender appraises your lot (typically as part of the construction appraisal) and uses that value as part of your down payment toward the total project cost. The construction escrow is funded with the new loan proceeds, the builder draws against it in inspected stages, and the loan converts (or refinances) to your permanent mortgage at completion.
No problem. Your existing lot loan is paid off at construction closing — the new construction loan covers both the lien payoff and the build. You go from "lot loan + building someday" to "one mortgage on a finished home" in a single transaction.
You can use the same OTC structure as a normal construction loan — rate locked at the start, single closing, automatic conversion at completion. Your lot equity just shrinks (or eliminates) the cash you need to bring.
The lender looks at the total project (lot value + construction cost) and figures your loan-to-value (LTV) against the as-completed appraised value. Your lot's equity essentially fills the "down payment" gap.
$100K lot, $300K build, $400K final value
$120K lot value, $60K lot loan, $250K build
Illustrative only — actual numbers depend on appraised lot value, as-completed value, program LTV, and lender rules. Not an offer or approval.
Because you're financing only the construction (not also buying the lot), the total loan is smaller AND your existing equity offsets the down payment. On most files this is the cheapest, fastest path to a custom home in Texas.
Don't assume you need to pay off the lot loan first. The new construction loan pays it off at closing. As long as your total equity (after payoff) supports the LTV, you're in business.
Set 'down payment' to additional cash on top of your lot equity. If lot equity alone covers the LTV, your cash to close can be near zero. For illustration only — not an offer or approval. Excludes taxes, insurance, HOA, and mortgage insurance.
Build on Owned Land uses the same wholesale construction investors as standard OTC and two-time — the difference is they credit your lot equity toward the down payment. I shop them for the best structure on your specific equity position.
Texas has unique constitutional lien rules for construction. On a homestead, the construction contract generally must be signed by both spouses, executed at the title company or an attorney's office, and signed at least one day after the contract date with a 3-day right of rescission. These protect homeowners but mean paperwork must be done precisely — I coordinate this with your title company.
| Feature | Build on Owned Land | Land + Build |
|---|---|---|
| What's financed | Construction only | Lot + construction |
| Cash to close | Often $0–minimal | Higher |
| Down payment source | Lot equity | Your cash |
| Existing lot lien | Rolled into build | N/A |
| Cost efficiency | Highest | Standard |
| Best for | You already own the lot | Starting with no land |
Use this product — your equity makes it the cheapest path. If you don't own a lot yet, see the Land + Build page.
Your lot equity is the cheapest down payment money you'll ever find. Let's structure the build with little or no cash to close. No cost, no obligation. English & Turkish.