To apply for a construction loan you will need all the documentation that you need for any other type of mortgage application;
*Income- Most recent 30 days of pay stubs and last 2 years of W-2's. If you are self employed, write off any income, and/or own any other real estate, add your 2 most recent federal tax returns to the list. No state returns are needed.
*Assets- 2 most recent months of statements for all your cash accounts (checking, savings, investment and retirement).
*Credit Report- Lenders can run your credit report but I would rather I use one you have run until we are sure we are going to do business with each other. Don't let everyone you speak to run your credit!! This is a quick way to drop your credit score. You can run your own report without losing any any point. This is a great place to do that, https://www.annualcreditreport.com.
*Credit Events- Bankruptcy in the last 2-4 years? You will need your petition and discharge. If you have had a foreclosure in the last 4-7 years you will need to document when the home was deeded out of your name. If you have had a Short Sale in the last 2-4 years you'll need the address of the property.
And some docs that are unique to construction loans;
*Land- If you already own the land you will need to provide a copy of your Settlement Statement, Deed and Survey if you have one. If you took out a loan to purchase the land please mention the lender and loan balance.
*Home- Eventually you will need a contract with your builder for construction of the home along with the plans and specs for the home. If you are an owner/builder you will need a line item budget along with the plans/specs.
The underwriter wants to see the source of the funds you are using for your down payment and closing costs. If you had a large deposit come into one of you accounts in the last two months make sure you bring this up to your loan officer.
It's very important for your loan officer to speak to your builder early in the process. Ever lender has a builder approval process and lenders may differ on how/when draws are dispursed. It's important to find out early in the process if your builder can work with the lender's program.
If you plan on doing any of the work on the home, let your loan office know upfront. I don't know of any single close program that will let a homeowner do part of the construction. If you plan on being your own General Contractor, let your loan officer know. You most likely will need to do a 2x close loan.
To learn more check out my website, www.bestfhaconstructionloan.com.