Thinking about building a home in Eagle River? Financing a new build works differently than a traditional purchase, and the details can feel overwhelming. You want the right loan, the right rate, and a plan that fits our Alaska seasons. In this guide, you will learn how construction loans work, how to lock your rate, what deposits and draws look like, and how winter affects your schedule. You will also see how to compare a builder-preferred lender to an independent lender. Let’s dive in.
Your financing path: one-close or two-close?
One-time-close basics
A construction-to-permanent loan, also called one-time-close, wraps your construction financing and permanent mortgage into a single loan with one closing. During the build, you pay interest only on the funds that have been disbursed. When the home is complete, the loan converts to a standard mortgage without a second closing. Many Eagle River buyers like this option for its convenience and single set of closing costs.
Two-close option
A two-close structure means you use a short-term construction loan, then refinance into a separate permanent mortgage at completion. You will have two closings and two underwriting events. Some buyers use this path if they cannot lock permanent terms upfront or if a specific program requires it. Ask lenders for a side-by-side cost and timeline comparison.
What lenders need to approve
Expect to provide a detailed construction contract, plans and specifications, the builder’s budget and schedule, and a contingency allowance. Lenders order inspections before each draw and require lien waivers and proof of insurance. Conventional lenders are most common for new builds in the Anchorage area, while FHA, VA, or USDA construction options may be available through select approved lenders. You can also ask about Alaska-focused programs through the Alaska Housing Finance Corporation.
Locking your rate for a build
Extended locks and float-downs
A standard rate lock lasts 30 to 60 days, which is not enough for most builds. Many lenders offer extended rate locks for 90 days, 6 months, 9 months, or even 12 months, usually for an added fee or higher points. Some locks include a float-down that lets you capture a lower rate once if the market improves, often for a fee. Ask for the lock terms in writing so you know your exact costs and options.
What if construction is delayed?
Delays can happen. Confirm whether your lender offers a short grace period or charges a monthly extension fee if your build goes past the lock date. For one-time-close loans, ask whether the lock applies to the permanent conversion. Compare the cost of an extended lock to the potential cost of refinancing later if rates climb. The goal is to protect your budget without paying for more lock time than you need.
Deposits, draws, and inspections
Typical deposits and refund terms
For new construction, it is common to pay initial earnest money and a builder deposit at contract signing. In many cases, the builder deposit is in the 5% to 10% range of the purchase price. Refundability depends on your contract, including what happens if financing is denied or you cancel at certain stages. Ask for clear language on timelines, release conditions, and whether large deposits can be held in escrow.
How draws work
Construction funds are released in draws based on progress. Typical stages include lot and permits, foundation, framing, rough-in mechanicals, insulation and drywall, interior finishes, and final closeout. Most projects use 4 to 8 draws depending on complexity. Before each draw, the lender will verify progress, require invoices and lien waivers, and may hold a small retainage until the final inspection.
Inspections, liens, and insurance
Lender inspections are separate from municipal inspections required by the Municipality of Anchorage. Your builder should use licensed contractors and carry appropriate liability and builder’s risk insurance. Lien waivers help protect you and your lender, but contractors in Alaska can file mechanics’ liens if not fully paid. The draw and waiver process is designed to reduce that risk.
Winter in Eagle River: plan the timeline
Seasonal schedule and costs
South-central Alaska has a short exterior construction season from late spring to early fall. Winter conditions slow or stop sitework, excavation, and concrete work unless contractors use cold-weather methods like heating, insulated formwork, or admixtures. These measures can add cost and complexity. Plan a conservative build timeline of 6 to 12 months or more, and include an extra 30 to 60 days of seasonal contingency.
Practical steps to stay on track
- Ask for a realistic build calendar with seasonal milestones tied to the draw schedule.
- Confirm if any winter work is planned and what added protections or costs are included.
- Order a site-specific geotechnical report to inform foundation design and permits.
- Build in time for municipal permits and inspections, and keep paperwork complete to avoid delays.
- Choose lenders and builders familiar with Eagle River and local inspection cadences.
Builder-preferred vs. independent lenders
Pros and cautions
Builder-preferred lenders often know the builder’s process, which can speed up draws and paperwork. They may offer incentives such as temporary buydowns, closing cost credits, or upgrade credits. Incentives can be valuable, but always compare the full picture. A slightly lower upfront cost can hide a higher rate or added fees. Federal law requires disclosure if there is an affiliated business relationship, and you have the right to shop.
What to compare side by side
- Interest rate and APR for both the construction phase and the permanent loan.
- Lock length, cost of extensions, and float-down availability.
- Total closing costs with and without builder incentives.
- Draw process details, inspection turnaround, and lien waiver procedures.
- Lender experience with Eagle River builders, winter schedules, and municipal timelines.
- Service and responsiveness, plus references from recent local buyers.
Your next steps
- Get preapproved with two or three lenders that offer one-time-close and two-close options.
- Request a written lock policy, including fees, extension terms, and any float-down.
- Ask your builder for a draft contract, deposit and refund language, and a milestone-based draw schedule.
- Confirm insurance, licensing, and lien-waiver procedures.
- Map the timeline from permit to completion with seasonal contingency built in.
When you are ready to compare plans or negotiate terms, our construction-savvy team is here to help. We work with local builders and lenders every day and can guide you through deposits, draws, locks, and timelines with confidence. If you want a clear plan for your Eagle River build, connect with Top Homes Alaska to get started.
FAQs
How do construction-to-permanent loans work for Eagle River builds?
- A one-time-close loan funds construction with interest-only payments on disbursed funds, then converts to a permanent mortgage at completion without a second closing.
What deposit should I expect for a new build in Eagle River?
- Many builders request a 5% to 10% builder deposit at contract signing, but the amount and refund terms depend on your contract and project type.
Can I lock my mortgage rate for a 6 to 12 month build?
- Yes. Many lenders offer extended locks for 90 days to 12 months, usually with added fees, and some include a float-down option if rates fall.
What happens if my build goes past the rate-lock expiration?
- Lenders may allow a short grace period or charge monthly extension fees. Get the policy in writing and compare it to the cost of refinancing later.
Who manages draws and inspections during construction?
- The lender disburses draws after verifying progress, invoices, and lien waivers; the builder coordinates with the lender, and independent inspections are common.
Are builder lender incentives worth it?
- They can be, but compare the net cost by looking at rate, APR, points, fees, and long-term payments; you have the right to shop and receive required disclosures.
