The challenge here will be your credit score at 617. For conventional financing, most lenders these days are looking for a minimum of 720 as a mid-score. The underwriting criteria are even stiffer for construction financing, as the risk is generally perceived as greater for a lender than would be the case in purchasing an existing home. I suggest that you talk with a couple of well-established builders in your area and find out which banks and mortgage brokers these builders use for their custom-building clients. Lenders who routinely do new-construction financing are where you want to be and who you want to be talking with to help you analyze your options. Other than your credit score, which is not bad, but just not as storng as lenders are requiring most of the time these days post-banking meltdown, your financial parameters look solid -- all the more so if you happen to have good equity in your present home that you'd like to keep as rental investment property. Hope this helps you and your husband. Best wishes in pursuing your dream home!
Syndi Chesser, 100% Club, Broker Associate, Builder
Senior Partner - Chesser Meade Group
Accredited Buyer Representative (ABR)
Certified Distressed Property Expert (CDPE)
RE/MAX Associates of Louisville (Kentucky)
Basically you are going to have to qualify with both house payments counted against you. To include as a rental income, you will have to have a least one year to include in your income for a loan application.
I would help you but I don't offer consturciton loans. Usually your local bank or credit union is your best best for construction loans