Seeking Construction Loans in Texas? We Know Your Market

February 18, 2026

Expanding your company’s physical presence means building a space designed around your operations. Whether you are planning to open a new office, expand a facility, or add an industrial location, securing the right construction financing is a critical first step.

For small to medium-sized businesses, construction loans in Texas come with unique considerations that make local expertise especially valuable. Working with a lender who understands your market, timeline, and goals may help you move forward with greater confidence – from planning through completion.

Learn how our bank supports companies across the Southeast Texas Gulf Coast region with construction financing options designed around local market needs.

Understanding Construction Loans in Texas

Construction loans are designed to finance the cost of building a new commercial property rather than purchasing an existing one. Unlike traditional commercial real estate loans, construction financing is typically short-term and structured to fund a project in stages as construction progresses.

Many construction loans offer interest-only payments during the build phase, which may help your company better manage cash flow while your property is not yet generating revenue. Once construction is complete, the loan may convert to long-term financing, allowing you to move from building to operating without interruption.

Because construction costs, timelines, and regulations can vary by region, understanding how construction loans work in Texas is an important foundation for any expansion project.

Why Local Market Knowledge Matters When Building in Southeast Texas

Deciding to pursue a commercial construction project in our region presents challenges that are not always present in other parts of the state. Weather conditions, coastal building requirements, permitting timelines, and regional labor and material costs can all influence construction schedules and budgets.

A lender with local market knowledge understands how these factors affect construction financing and can help structure loans with realistic expectations.

This regional insight can be especially important when establishing an appropriate draw schedule, coordinating inspections, and managing potential delays. Working with a lender who has local expertise may help reduce surprises and keep your project aligned with both your budget and timeline.

Consider An Owner-Occupied Construction Loan

Working with a local lender can also help you find the financing option that best supports your specific business needs. For example, owner-occupied construction loans are designed for businesses that plan to operate out of the property they are building.

An owner-occupied property means your company plans to occupy typically at least 51% of the building upon completion of construction. The remaining portion may be available to lease to tenants, which could provide additional revenue.

Owner-occupied construction loans may support long-term stability by allowing you to invest in a space built specifically for your business needs while also generating additional revenue from companies that occupy the space you are not using.

Common Business Situations for an Owner-Occupied Construction Loan

An owner-occupied construction loan is commonly used by professional service firms, medical practices, manufacturers, industrial companies, supply chain logistics businesses, and many other types of local businesses across our region.

You can use this type of loan to support a wide range of expansion projects, including:

Professional and administrative office buildings
Medical and healthcare facilities
Industrial and warehouse spaces
Service-based business locations

Each project type has different construction costs, timelines, and operational requirements. Construction loans are flexible enough to support these varied needs when structured with a clear understanding of the local market.

For example, we recently helped a local transportation and logistics company acquire a new industrial warehouse through an owner-occupied commercial real estate loan. This acquisition supported the company’s growth within the local supply chain.

The Construction Loan Application Process and What You’ll Need

To get started on construction financing, you will need to follow our streamlined loan application process designed to support your project needs.

Being prepared with clear documentation and realistic projections helps keep the application and construction process moving efficiently. While details may vary, the process typically includes:

Initial planning and pre-qualification to evaluate project scope and feasibility.
Review of construction plans, contractor information, and cost estimates.
Setting a draw schedule that releases funds as construction milestones are met.
Managing interest-only payments during the construction phase.
Transitioning from short-term construction financing (typically around 12 months) to long-term permanent financing (terms may vary).

Alternatively, some borrowers may benefit from a one-time-close structure, which combines construction and permanent financing into a single closing. This approach can help simplify the process and reduce overall closing costs by eliminating the need for multiple loan closings.

Some lenders structure one-time-close construction loans to include a long-term permanent mortgage. At Texas Gulf Bank, N.A., our one-time close loans transition into a mini-permanent mortgage rather than a traditional long-term permanent loan.

How Texas Gulf Bank Supports Owner-Occupied Construction Projects

Our philosophy is to approach construction financing as a relationship, not a transaction. Our lenders understand the local market and work closely with your team throughout the construction financing process.

From evaluating construction budgets to coordinating draw schedules and planning for permanent financing, our team provides guidance designed to support your business beyond the build phase.

With over 110 years of experience serving the region, we believe that local decision-making and direct access to experienced lenders can help keep projects on track and aligned with your long-term goals.

Build With Confidence in Your Local Market

Expanding your business through construction is a significant investment. Choosing the right construction financing partner can make the difference between uncertainty and confidence throughout the process.

With construction loans in Texas that reflect regional market realities, flexible structures that may support cash flow, and a clear path from construction financing to long-term ownership, business owners can move forward with clarity and purpose.

Ready to explore construction financing options that fit your goals? Contact our team to discuss. Find out why it’s best to work with a local bank that knows your market and can help turn your plans into a lasting foundation for growth.

All loans subject to credit approval