Partnering with Capital City Home Loans to Make Building Simpler and Smarter

Building your dream home is one of life’s most rewarding experiences, but understanding the financial side can feel overwhelming. That’s where working with a trusted builder and lender partnership makes all the difference.

At Cowart Residential, we believe building your home should be as seamless and transparent as possible. That’s why we partner with lenders like Capital City Home Loans, who specialize in construction loans designed for Georgia homebuyers. If you’re planning to build on your lot (BOYL) or purchase within one of our developed communities like The Enclave at Mill Creek in Mulberry, understanding your financing options is the first step toward turning your vision into reality.

1. Why Pre-Approval Should Come First

No matter where you are in the home-building journey, whether browsing lots or finalizing plans, the best first step is to get pre-approved early.

Pre-approval gives you a clear understanding of your budget range, helps you plan your design confidently, and prevents surprises once construction begins. For both buying and building, lenders recommend getting qualified as soon as you start thinking about a home.

Your lender will review your income, credit, and financial goals to determine what you can comfortably afford. With that information, you can begin conversations with your builder knowing your numbers and options.

2. Construction Loan Options Available in Georgia

Capital City Home Loans offers multiple construction-loan products each tailored to meet different goals and financial profiles.

FHA Construction Loan

• Minimum 3.5% down payment
• Maximum loan amount in Fulton, Cobb & DeKalb Counties: $688,850
• Maximum loan amount for the rest of Georgia Counties: $524,225
• Up to 18 months construction period
• Ideal for first-time buyers or those with smaller down payments

Fannie Mae Construction Loan

• 5% minimum down payment
• Maximum loan amount $806,500
• Designed for borrowers with strong credit looking for flexibility

Jumbo Construction Loan

• For projects exceeding $806,500
• Up to 24 months to complete the build
• Competitive rates and long-term flexibility for larger more custom homes

Each option includes interest-only payments during construction, allowing you to manage costs efficiently while your home is being built. Once construction wraps, the loan automatically converts into the permanent mortgage, eliminating the need for a second closing or re-qualification.

This single-close structure, often referred to CP or Construction-to-Perm, saves time, stress, and money, one closing, one loan, one smooth process.

3. How the Draw Schedule Works

A construction loan releases funds in phases, known as draws, as your home reaches specific milestones.

Capital City Home Loans uses Built, an easy-to-use digital platform that keeps everyone on the same page: borrower, builder, and lender. This transparent system allows up to eight draws throughout construction, with inspections completed before each release of funds.

Unlike many lenders, Capital City doesn’t dictate the time-table for the draw schedules. That flexibility allows Cowart Residential and our clients to tailor timelines to fit the project, ensuring you only pay for completed work as you progress toward your dream home.

4. Understanding Contingencies and Costs

Building a home is an exciting process, but it’s smart to plan for the unexpected.

Even the most carefully prepared projects can encounter site-work changes, utility adjustments, or testing fees. That’s why we encourage clients to include contingencies in their financing plan.

If contingencies aren’t used, Capital City Home Loans can modify the loan balance, ensuring clients never borrow (or pay interest on) more than they need.

Additionally, clients should keep in mind:

• Taxes and insurance are typically out-of-pocket expenses during construction.
• Builder’s risk insurance is required, and most major insurance carriers offer it affordably.
• Initial draws typically cover about 10% of the project cost or $75,000, whichever comes first.

5. Special Programs and Georgia-Specific Details

Do Construction-to-Permanent (CP) Loans accept down payment assistance programs? Yes. As long as all other eligibility requirements are met for the loan, buyers can use many down payment grant assistance programs when buying or building their firsthome with an FHA or Fannie Mae construction loan.

In addition, qualified buyers may explore VA and USDA construction-to-permanent loan options. Each type of loan offers unique benefits but requires additional background verification.

Capital City Home Loans proudly serves eight Southeastern states: Georgia, Florida, Tennessee, Mississippi, North Carolina, South Carolina, Maryland, and Virginia, making them a trusted regional partner for families building new homes across state lines .

(Please note: Cowart Residential only builds homes in Georgia for individuals wanting to build out of state.)

6. Comparing Building vs. Buying

When deciding between building a custom home or buying an existing one, it often comes down to two main factors: timing and personalization.

Buying an existing home means you can move in sooner, but building gives you the opportunity to design every detail, from your floor plan and finishes to where the morning light hits your kitchen windows. It’s your vision, built from the ground up.

Financially, both paths begin the same way: with pre-approval and a clear budget. The main difference lies in how and when funds are released throughout the process.

That’s where Capital City Home Loans, our trusted lending partner, helps simplify the experience. Their Full-Service Construction Loan Program is designed to make financing your dream home as seamless as possible, combining multiple loans into one and removing the hassle of multiple closings.

Here’s what makes this program stand out:

• ✅ One-time close - only one approval and one closing needed.
• 🏠 Loan amounts up to $3 million for new construction or renovations.
• 💰 Up to 96.5% loan-to-value (LTV) on a primary home and 90% on a second home.
• 🧾 Bank statement programs available for self-employed borrowers.
• 🪜 Options include lot loans (to purchase land), bridge loans and construction loans (to fund the building process).
• 🕒 Interest-only payments during the build phase, converting to a permanent financing upon completion.
  
  

And here’s a bonus: If interest rates drop while you’re still building, you may qualify for a float-down option, meaning your rate can adjust lower before closing, potentially saving you thousands over time. However, if rates go up during your building phase, your rate does not. It will stay the same!

In short, building gives you control, customization, and long-term value. With the right financing partner, it can be just as smooth as buying an existing home.

7. Timing, Rates, and Market Advice

Rest assured that construction-to-permanent (CP) mortgage rates remain highly competitive in today’s market. During the construction phase, borrowers make interest-only payments, which helps manage cash flow while the home is being built. Once construction is complete, the loan will convert into your permanent mortgage, i.g, a traditional 30-year fixed loan, an ARM, or another long-term financing option tailored to your needs.

The best time to begin your construction loan process is before your plans and specifications are finalized. Getting pre-approved early, before significant time and money are invested, gives your entire team the confidence to move forward with clarity and purpose.

If any challenges arise during pre-approval, your lender can help outline an alternative strategy and ensure both you and your builder stay informed every step of the way. Strong communication between the builder, buyer, and lender lays the foundation for a smooth construction process and a stress-free experience from start to finish.

Because CP loans feature interest-only payments during construction, borrowers also have access to a one-time “float-down” option, meaning if interest rates are lower at the time you convert to your permanent loan, your rate can adjust downward. And, if rates are higher, your rate remains locked, protecting you from any increases.

Ultimately, early planning and pre-approval are two of the smartest steps you can take toward building your first home or your dream custom home in North Atlanta. With the right builder, the right lender, and a clear financial plan, your dream home is well within reach.

8. What to Ask Your Lender Before You Begin

Beyond rate and term, here are key questions to ask your financial professional before committing:

• What contingencies are built into my loan if costs change?
• How flexible is the draw schedule?
• What happens if construction finishes ahead of schedule?
• Is builder approval required before closing?
• How does interest-only billing work during the draw period?
• Can I lock or float down my rate before final closing?
• What documentation do I need if I already own my lot?

By asking these questions early, you’ll set yourself up for a smoother, more confident building experience.

9. Partnering with Cowart Residential and Capital City Home Loans

When you build with Cowart Residential, you get more than a builder. You gain a trusted partner. Our team’s 40+ years of experience, paired with Capital City Home Loans’ expertise in construction financing, ensures every detail, from land acquisition and zoning to closing. It’s all handled with transparency and care.

We’ll soon be introducing exclusive lender incentives to make your home-building experience even more rewarding.

If you’re ready to build on your lot, explore The Enclave at Mill Creek, or learn more about upcoming developments, now’s the perfect time to start the conversation. Why? Because right now, we’re offering $25,000 toward closing costs ! Hello savings before the holidays!

Ready to Begin? Let’s Build Your Future Together

Building a home is one of the biggest investments you’ll ever make, but with the right builder and lender by your side, it doesn’t have to be complicated.

Let Cowart Residential and Capital City Home Loans guide you through every step, from vision to keys in hand.

📍 Serving Dunwoody, Alpharetta, Milton, and the North Atlanta area.

🛠️ Built with integrity. Designed with intention.