Construction Loan Down Payment Calculator
With a $400,000 build, $80,000 lot and $15,000 in financed soft costs, an assumed 80% LTC requires $99,000 down on a $495,000 project. If you own the lot outright, its $80,000 equity reduces cash toward the down payment to $19,000; buying the same lot requires $99,000 cash.
Completely free, no sign-up. Last updated: November 14, 2026
Calculate your construction loan down payment
Conventional 80% is an assumed example, ask your lender. FHA, VA and USDA defaults illustrate only the minimum-down-payment rules linked below; they are not agency LTC approvals. Lenders can require more. Edit the maximum LTC to match your lender.
For a $495,000 total project cost at 80% LTC, you need $19,000 cash toward the down payment at closing, after $80,000 in land equity credit.
- Max loan
- $396,000
- Down payment required
- $99,000
- Land equity credit
- $80,000
- Cash you bring
- $19,000
Compare down payments for your project
Same live project inputs; fixed program assumptions. Swipe or scroll horizontally on small screens.
| Program / assumed LTC | Max loan | Down payment required | Land equity credit | Cash you bring |
|---|---|---|---|---|
| Conventional 80% (assumed) | $396,000 | $99,000 | $80,000 | $19,000 |
| Conventional 90% (assumed) | $445,500 | $49,500 | $80,000 | $0 |
| FHA 96.5% | $477,675 | $17,325 | $80,000 | $0 |
| VA 100% | $495,000 | $0 | $80,000 | $0 |
| USDA 100% | $495,000 | $0 | $80,000 | $0 |
Estimates only. Cash shown covers the equity contribution, not every closing expense or required reserve. Only entered costs are included; financing eligibility is not checked. Maximum loan is an LTC ceiling, not the amount you must borrow. Appraised-value caps and loan limits, including VA/USDA limits where applicable, are not modelled.
Construction loan down payment by loan type
Agency minimums are starting points, not a promise that your entire construction budget qualifies. The calculator uses them as simplified LTC examples; lenders can require a larger contribution and exclude costs from financing. Conventional requirements depend on the lender and investor LTV limits such as Fannie Mae’s.
| Program | Minimum down payment | Source |
|---|---|---|
| FHA one-time close | As low as 3.5%; construction eligibility must be confirmed. | HUD FHA loans |
| VA | No down payment if the price is not higher than the appraised value; a funding fee may apply. | VA purchase loans |
| USDA Single Close Construction-to-Permanent (Guaranteed Loan Program) | No down payment required for eligible borrowers and properties. | USDA program page |
| Conventional | Set by the lender and investor LTV limits such as Fannie Mae’s; no single official percentage. | Fannie Mae single-closing rules |
Checked 2026-11-14
Worked example: down payment with and without land equity
Assumed example: $400,000 construction plus $15,000 financed soft costs, with each lot either purchased or already owned free and clear. Every cell is cash toward the down payment at closing, calculated with the same function as the tool. These fixed examples do not change with your inputs above.
| Land value / price | 80% LTC: buying land | 80% LTC: land owned | FHA 96.5%: buying land | FHA 96.5%: land owned |
|---|---|---|---|---|
| $40,000 | $91,000 | $51,000 | $15,925 | $0 |
| $80,000 | $99,000 | $19,000 | $17,325 | $0 |
| $120,000 | $107,000 | $0 | $18,725 | $0 |
Owning land adds equity, while the lot value remains part of total project cost. Buying a more expensive lot increases the cash contribution at the same LTC. Excess land equity eliminates this model’s cash contribution but does not pay unrelated closing bills or create a cash refund.
How to calculate a construction loan down payment
Maximum loan = total project cost × maximum loan-to-cost percentage ÷ 100. Required equity = total project cost − maximum loan. Land equity credit = appraised land value − land loan payoff, floored at zero. Cash needed = required equity − land equity credit, also floored at zero.
Include the land purchase price, or accepted land value if owned, plus hard construction costs and eligible soft costs. Include contingency once in your construction budget or soft costs; do not count it twice. This tool assumes entered soft and closing costs can be financed. Confirm which costs qualify before relying on the cash estimate.
LTC measures borrowing against cost; loan-to-value measures borrowing against the as-completed appraisal. Where both caps apply, the lender uses the lower permitted loan amount. This tool does not model the appraisal cap or loan limits. Fannie Mae’s rules use the lower of purchase cost and as-completed value for a purchase, but as-completed value for an owned-lot limited cash-out refinance.
Ways to cover the down payment
Possible sources include accepted land equity, cash savings and gift funds where the program allows them. Check your program’s gift rules and documentation requirements before moving money. Bring the land appraisal, payoff information and evidence of available funds so your lender can verify the contribution.
Keep a separate budget for expenses outside the loan and funds the lender requires you to retain as reserves. A zero cash down-payment result means accepted equity covers this calculation’s contribution; it does not mean the entire project needs no available cash.
Down payment vs pre-approval: what lenders check
A down-payment estimate answers a funding question; pre-approval also involves credit, debt-to-income ratio (DTI), income documentation and reserves. Construction underwriting adds builder approval, project plans, budget and appraisal review. Having enough equity alone does not establish eligibility or guarantee a loan.
Take this estimate to your lender alongside the builder’s budget and land documents. Ask it to confirm the accepted land equity, eligible costs, maximum LTC, appraisal-based limit and cash due at closing before you finalize the project.
Construction loan down payment FAQ
How much is a down payment on a construction loan?
The required contribution depends on the program, lender and project. This tool starts with an assumed conventional 80% LTC, leaving 20% equity; that is not an official conventional minimum. Enter your lender’s percentage to estimate how much down for a construction loan after eligible land equity.
Can I use my land as a down payment?
Land equity may count toward your contribution when the lender accepts it. This estimate subtracts the land loan payoff from current appraised land value and floors the credit at zero. Ask which valuation your lender accepts, what ownership documentation it needs and how it handles existing liens.
Can you build a house with no money down?
Eligible VA and USDA borrowers may qualify for no-down-payment financing to build a home. VA’s no-down-payment benefit depends on the price not exceeding appraised value. USDA’s Guaranteed Loan Program describes 100% financing for eligible rural borrowers, including new construction. Closing costs, fees and reserves may still require cash.
Is the FHA construction loan down payment 3.5%?
HUD says an FHA down payment can be as low as 3.5%. The 96.5% setting here translates that minimum into a simplified cost-based illustration. It does not confirm FHA one-time-close eligibility, the lender’s required investment calculation or financing of every cost. Ask your lender to verify the construction program and approved budget.
Sources: HUD FHA loans
Does the down payment cover closing costs?
The down payment is your equity contribution; closing costs are separate charges. Enter only soft and closing costs your lender agrees to finance. Any unfinanced charges, prepaid taxes, insurance, program fees or required reserves need a separate cash budget, even when this calculator shows zero cash toward the down payment.
When is the down payment due on a construction loan?
It depends on the loan structure. With a single-close construction-to-permanent loan, your contribution is usually settled at the one closing, before the lender starts paying draws. With a separate construction-only loan, you close on the construction loan first and the permanent mortgage later, so cash can be due at each closing. Confirm the exact funding instructions and timing with your lender and closing agent. Land equity is documented rather than wired as cash; ask how any deposits already paid will be credited on the closing statement.
Related tools
- Land and construction loan calculator — model the lot payoff and build draws.
- Interest-only construction loan calculator — estimate payments during construction.
- Permanent loan calculator — estimate the mortgage after completion.
- Construction loan calculator — plan the full draw and payment schedule.