Build a house allows adapting the property to the family's needs, but requires strict financial planning. In addition to construction costs, it is necessary to consider the land price, the architectural project, licenses, infrastructure connections, and unexpected issues that may arise during construction.

One of the most frequent questions is whether the bank can finance both the land purchase and the housing construction.

The answer depends on the financial institution, the project's characteristics, available guarantees, and buyers' financial capacity. There are construction credit solutions that may include different investment components, but financing is not automatic and does not necessarily cover all expenses.

Can you finance the land and construction in the same loan?

Some institutions provide housing credit solutions for construction that may include land and future housing financing, subject to process analysis.

In other cases, the land purchase and construction may need to be funded separately or through different financing structures.

Before proceeding, you must confirm with the bank:

If the financing can include the land and the construction

What is the maximum percentage of financing applicable

How much own capital will you need to provide

What documents and licenses are needed

How will the money be released during the work

What guarantees will be required

What costs will you have to bear before the first credit release

It's important not to assume that loan approval for construction means all project expenses will be covered.

How does land financing work?

Poupança no Minuto financing depends on the intended purpose, property characteristics, and credit policy of the institution.

A plot intended for permanent private housing can be analyzed in the context of a global project, but the bank may require additional documentation, such as information on construction feasibility, urban planning, and the proposed project.

Buy the land before the construction project is approved, assess the risk of not getting the expected financing later.

Before signing a purchase contract, confirm the legal and urban status of the land and check if the intended construction is feasible.

How does housing credit for construction work?

Unlike a loan to buy an already completed house, a construction loan can be released in phases as the work progresses.

The process may include several steps.

Customer and project analysis

The bank assesses returns, costs, payment capacity, and financing risk. It also analyzes the land, project, construction budget, and elements needed to evaluate the future property.

2. Approval of conditions

If the request is approved, the institution communicates the financing conditions, including the amount, term, interest rate, guarantees, and money release rules.

Approval is subject to the institution's criteria and applicable contractual conditions.

3. Release of funding in tranches

In many construction credit contracts, money is released in tranches, that is, in installments linked to the project's progress.

The institution may require inspections or appraisals to confirm construction progress before releasing each installment. The number of installments, amounts, and release criteria depend on the contract.

This feature is especially important for financial planning: it may be necessary to pay certain expenses before receiving the next installment.

4. Work monitoring

During construction, monitor payments to contractors, deadlines, budget changes, and financing conditions.

Delays in the work can have financial consequences, especially if costs increase or the money availability schedule no longer matches payment needs.

How much capital is needed?

The required amount depends on the total project cost and the conditions approved by the bank.

For calculating equity, consider:

The value of the land

Construction costs

Architecture project and specialties

Applicable licenses and fees

Land preparation works

Water, electricity, sanitation, and telecommunications connections

Taxes, insurance and subscription costs

A buffer for emergencies

Do not calculate your money needs only based on the amount the bank is willing to finance. Some expenses may not be included in the loan and may need to be paid before the work starts.

What documents may be required?

Documentation varies from bank to bank, but may include:

Identification documents of the applicants

Income statements and professional status documents

Information about other credits and charges

Land documentation and respective registration

Urban elements and applicable licenses

Architecture project and specialty projects

Detailed construction budget

Contractor identification, when applicable

Scheduled calendar for the work

The bank may request other elements to assess the project's feasibility and repayment capacity.

Buy the land first or ask for financing for everything?

There is no better solution for all cases. Buying the land in advance can allow more time to prepare the project, but it involves immobilizing capital and assuming the risk of not getting construction financing under expected conditions.

Try structuring land and construction financing together to get a more integrated view of the investment, but depends on available solutions and bank approval.

Before making a decision, compare the costs, deadlines, and requirements of each alternative.

Simulate your construction loan

Are you planning to build a house and want to know what financing options may be available?

Get a free and commitment-free simulation to receive a personalized analysis of your project and discover the most suitable financing solutions for your needs.

FAQ

Does the bank always finance the land and construction?

No. It depends on the solutions provided by the institution, the project, the guarantees, and the solvency analysis. It should confirm in advance if both components can be included in the financing.

Can I get a construction loan if I already own the land?

Yes, you can apply for a loan for construction, subject to the bank's analysis and approval. The land may be relevant for the evaluation of guarantees, but it does not ensure credit approval.

Does the bank release all the money at the start of the work?

In many contracts, funding is released in tranches according to construction progress and defined conditions. Confirm the schedule and release criteria before contracting.

Do I need money beyond the loan?

You may need it. Credit may not cover all project expenses and payments may be required before tranches are available. It is essential to plan for own capital and a contingency margin.

Can I start building before getting the loan approved?

It is possible to start projects with own resources, but taking on significant expenses before confirming financing involves risks. The most prudent is to clarify approval and credit availability conditions before taking on difficult-to-revert financial commitments.

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