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Financing a new-construction home in Chester County

A finished house is appraised on what it is. A house that exists as a plan set is financed on what it will be, and the timing questions get harder from there.

Financing a new-construction home, in round numbers
Stonemill Village, Downingtown89 townhomes from $540,000 (Toll Brothers, Aug 2026)
Regency at Valley Creek, ExtonFrom $709,995, listed 55+ (Toll Brothers, Aug 2026)
FHA insurabilityNot until final inspection or the CO, whichever is later (HUD 4000.1)
Transfer tax2% county-wide; 2.5% Malvern and Tredyffrin, 3% Coatesville (chesco.org)

What is being built here

New construction in Chester County runs from a single house on a family lot to a production community with a design center and a delivery calendar. Toll Brothers alone lists three here: Anfield at Malvern, Stonemill Village in Downingtown at 89 townhomes from $540,000, and Regency at Valley Creek in Exton, which Toll lists as a 55+ community, from $709,995 (tollbrothers.com, August 2026).

The two published starting prices sit under the 2026 conforming limit of $832,750 (FHFA, November 2025). Options, upgrades and a lot premium have a way of closing that gap, which is the first reason to know where the jumbo line falls before you visit a design center. That room is where a build goes over budget, one reasonable-sounding decision at a time.

Deposits and the paragraph nobody reads

A builder contract usually takes money in stages: a deposit at signing, more when selections are made, sometimes more again at a construction milestone. Those dollars are the part of the transaction with the least protection, so three questions belong in the conversation before you sign.

Is the deposit held in escrow, and by whom. Does the agreement carry a mortgage contingency, and if it does not, what happens to the deposits if the loan does not come together. And are selections priced before or after you commit, because an options bill agreed at the design center changes the loan amount, and the loan amount was underwritten months earlier.

Get the answer to all three in writing before the deposit leaves your account.

The builder’s lender, and yours

Builders commonly offer an incentive tied to their affiliated lender: closing-cost credits, an options allowance, sometimes a buydown on the financing. The incentive is real money and worth taking seriously. It is also worth pricing.

Get both quotes on the same loan amount, the same term and the same lock length, and compare the total cost, including what the incentive actually pays for. Ask directly whether the incentive survives if you finance elsewhere, and get the answer in writing. Two quotes on one page turns the question into arithmetic.

An appraisal written on a plan set

An unbuilt house gets appraised on its plans and specifications, producing an “as completed” value. VA allows the appraisal to be ordered that way where it would reasonably be finished before the foundation is (Circular 26-18-7), and Fannie Mae’s construction rules run their loan-to-value math off the “as completed” appraised value.

Two things follow. The plans and specs the appraiser works from need to match what you are actually buying, including approved change orders, because the original appraiser comes back at completion to certify exactly that. And if the appraisal lands under the contract price, the gap is yours to negotiate or to cover, the same as on a resale, subject to lender approval.

The occupancy certificate is the gate

The township’s certificate of occupancy is what turns a construction site into a house, and mortgage rules are built around it. A construction-to-permanent mortgage is not FHA-insurable until the final inspection or the CO, whichever comes later (HUD 4000.1 II.A.8.j). On VA, every minimum property requirement has to be satisfied before the Loan Guaranty Certificate issues, with the final inspection performed by the original appraiser at 100% completion.

So the closing date follows the certificate of occupancy, whatever month the builder’s calendar promised. A build in a township outside a public sewer district also carries a Chester County Health Department well permit and on-lot sewage permit, and those approvals sit in the same critical path.

The walkthrough, and the last week

The pre-settlement walkthrough is yours, and it is worth taking slowly. Run every faucet, open every window, check that the selections in the house match the selections on the contract, and write the punch list down. Ask what gets fixed before settlement and what goes on a post-closing list, and get that split in writing.

Then ask the lender how the escrow was projected. A brand-new house in Chester County is assessed against 1996-era values, and the county’s common level ratio of 30.6% applies to interim appeals effective July 1, 2026 through June 30, 2027 (chesco.org, August 2026). Until the assessment catches up with the finished house, the tax figure in your escrow is an estimate.

Answers on the record

Do I have to use the builder's lender?

Incentives are often tied to the builder's affiliated lender, so the question is what the incentive is worth against the full cost of the loan. Ask whether the incentive survives if you finance elsewhere, and get both quotes in writing on the same loan amount and the same term before you decide.

How is a house appraised before it is built?

On the plans and specifications, producing an "as completed" value. VA allows an appraisal to be ordered that way where it would reasonably be completed before the foundation is finished, and the original appraiser returns at 100% completion to confirm the house matches those plans, specifications and approved change orders.

Why does the certificate of occupancy matter to my loan?

Because it gates the file. Under HUD Handbook 4000.1 a construction-to-permanent mortgage is not FHA-insurable until the final inspection or the certificate of occupancy, whichever comes later, and on VA all minimum property requirements must be met before the Loan Guaranty Certificate issues. A delivery date that slips takes the closing with it.

What should I ask about locking my rate on a build?

How long the lock runs, whether an extended lock is available for a delivery date months out, what an extension costs, and whether there is a float-down if the market moves. FHA permits a documented float during construction with a maximum rate stated and the borrower qualified at that maximum, and VA permits a ceiling-floor float.

Who pays the transfer tax on a new build?

Whoever the agreement of sale says. The county rate is 2%, with 2.5% in Malvern Borough and Tredyffrin Township and 3% in the City of Coatesville (chesco.org, August 2026), and the customary practice is a 50/50 split. On a builder contract, read that clause before you sign it.

Write it down instead

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One call, with the delivery month

New construction rewards early conversations, because almost every decision on this page has a date attached to it: the deposit schedule, the lock, the appraisal, the certificate of occupancy and the walkthrough. Sorting the financing while the house is still a plan set costs nothing and keeps the calendar honest.

Tell whoever answers the phone which community, which delivery month, and what the builder is offering. A licensed Pennsylvania lender calls you back with the loan structures that fit that calendar, usually the same business day.

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