Build new → construction. Renovate a standing home → fix & flip. Buy a finished home → conventional. Span a gap / hold land → bridge. Hold the finished rental → DSCR (the takeout).
The side-by-side
| Loan | Best for | Funds a build | Term | Sizes off |
|---|---|---|---|---|
| Construction | Ground-up new build | Yes, draws | 12–24 mo | Completed value / cost |
| Fix & Flip | Renovate a standing home | Rehab only | 6–18 mo | ARV |
| Bridge | Timing gap / hold land | No | 11–24 mo | Value / equity |
| Conventional | Buy a finished home | No | 30 yr | Purchase / value |
| DSCR | Hold finished rental | No | 30 yr | Rent (DSCR) |
Head-to-head matchups
Construction vs Fix & Flip
Construction builds new (hard + soft costs to completed value); fix & flip renovates a standing home off ARV.
Construction vs Bridge
Bridge spans a timing gap and doesn't fund a build; some lenders bridge the land, then convert to a construction draw.
Construction vs Conventional
Conventional buys finished in one close at standard rates; construction funds the build, and C2P converts into perm financing.
Construction vs DSCR
They pair: construction builds the income property, then a DSCR loan holds it as the long-term takeout.
The choice that defines your loan: C2P vs construction-only
| Construction-to-Permanent | Construction-Only | |
|---|---|---|
| Closings | One | Two |
| Permanent rate | Locked up front | Re-priced at refinance |
| Closing costs | Paid once | Paid twice |
| Requalify later? | No | Yes |
| Best for | Most custom-home builders | Developers with a specific exit |
The decision framework
Building new to live in or hold?
→ Construction (usually C2P).
Building new to sell or hold as a rental (developer)?
→ Construction → sale, or → DSCR takeout.
Renovating an existing structure?
→ Fix & flip.
Just need to hold land or span a gap?
→ Bridge, then convert to construction.
Construction comparison FAQs
Construction vs fix & flip?
Construction builds new to completed value; fix & flip renovates a standing home off ARV.
Construction vs bridge?
Construction funds a build; bridge spans a timing gap and can hold land until permits.
Construction vs conventional?
Conventional buys finished; construction funds the build and C2P converts to perm.
Construction vs DSCR?
They pair — construction builds the rental, DSCR is the long-term takeout.
C2P or construction-only?
C2P for most homeowners (one close, locked perm rate); construction-only for developers with a specific exit.
Reviewed by the licensing team at Save Financial, a California-licensed mortgage brokerage (NMLS #377740, DRE #01875766) founded in 2009 and serving all 58 counties from offices in Newport Beach and Marina del Rey.