Most lenders advertise '20% down' for construction loans. The reality in Idaho is more nuanced — and often more favorable. Here's exactly how down payment requirements work, what counts as equity, and how to get to 5% down on a primary residence build.
In This Guide
The '20% down' figure you see on most construction loan websites is the requirement for investment properties and second homes — not primary residences. For a primary residence construction loan in Idaho, our single-close program goes as low as 5% down. That's a significant difference on a $600,000 build: $30,000 vs. $120,000.
The reason this myth persists is that many banks and national lenders have pulled back from construction lending entirely, and the ones still offering it often use conservative terms. Credit unions and specialized construction lenders — who stayed active in the market — offer more competitive down payment requirements.
If you already own the lot where you plan to build, the equity in that land counts toward your down payment requirement. This is one of the most powerful and underutilized features of construction lending in Idaho.
Here's how it works: the lender appraises the lot at its current market value. If you own it free and clear, 100% of that value counts as equity. If you have a lot loan on it, the equity is the difference between the appraised value and the outstanding balance. That equity is applied against the total project cost to determine your loan-to-value ratio.
Consider a borrower building in Meridian with the following profile:
Idaho lenders accept the following as down payment sources:
Building in Arizona?
We serve Arizona too — same programs, same specialist.
Single-close construction loans, 5% down, up to $3M. Phoenix, Scottsdale, Tucson, Flagstaff, and beyond.