How woukd cost plus work with a construction loan?

The loan will need to give your plans to an appraiser and he will give it an initial appraised value. Usually, there is a difference in cost and value, most require a minimum of 10%. Meaning if the house appraises for $100, then you can borrow $90 to build it. Some require you to own the land, some have other considerations. If you are doing a FNMA/FHlMC one time close, then they may allow more.

If you are doing cost plus, I would essentially get a construction and then do a permanent. Less restrictions. It will depend more on your lender. If you need more money, then you may have an issue. I would be wary about that situation if you have little equity, you may end up out of pocket and won't have any money furnish, move in, etc.

Most builders give a price per square ft and have a scenario for contingencies, changes, etc. They usually have more than enough profit built in. So minor changes aren't an issue. I would think cost plus could work though.