Financing a self-build in Quebec: the construction loan in draws, the land down payment, the FHSA and the warranty that does not exist

Building · Self-build · Financing

The construction loan is nothing like a mortgage: it is released in draws, costs interest during the build, and requires a budget that holds. Here is the mechanism and the three programs that help.

A self-build is financed in two stages: the land first, with a higher down payment than a house and fewer lenders, then a construction loan, released in draws (foundations, closed-in structure, finishing, end of work) after the lender's inspection, whose interest runs during the build before it is converted into an ordinary mortgage. The FHSA does not finance land alone, but a withdrawal can qualify in a land + construction project with a written agreement; the Home Buyers' Plan follows its own rules. A first-time buyer who builds can get 100% of the GST back, up to $50,000, on a construction begun on or after 20 March 2025. What a pure self-build lacks is the GCR warranty, reserved for buildings built by an accredited contractor. Figures read on 15 September 2026 on garantiegcr.com and revenuquebec.ca.

The land first

The lot is financed separately, with a higher down payment than a residence and from fewer lenders, especially if it is not serviced. Many projects start with a lot paid in cash or financed by a line of credit on the current home. Our eight checks before buying land come before the financing, because an unbuildable lot cannot be financed twice.

The construction loan, in draws

1. The file. Plans, detailed quotes or a contractor's contract, the building permit (see our permit fees by city), a complete budget with a contingency reserve, and proof of the down payment.
2. The draws. The lender advances the money in stages, typically at the foundations, the closed-in structure, the interior finishing and the end of the work, each time after a progress inspection by its appraiser, at your expense.
3. Interest during the build. You pay interest on the amounts disbursed during construction; at the end, the loan is converted into an ordinary mortgage, at the agreed rate and term. Our page mortgage rates (in French) gives the current benchmarks.
4. The holdback. Part of the last draw is held until final compliance and, for contractors, until the construction legal hypothec delays expire.

The three programs that help

• FHSA. A withdrawal to buy land alone is not eligible; it can be in a land + construction project with a written construction agreement and occupancy of the home as a primary residence. Our page FHSA and buying land (in French) gives the rule word for word, and the 2026 maximum the limits.
• Home Buyers' Plan. The RRSP withdrawal for a qualifying home can serve for a home you build, under the usual occupancy and timing conditions.
• First-time buyer's GST. A first-time buyer who builds can recover 100% of the GST paid on materials and work, up to $50,000, if construction began on or after 20 March 2025. Our page taxes on a new home gives the thresholds.

What a self-build does not have: the GCR warranty

The mandatory guarantee plan covers new residential buildings built by an accredited contractor, who pays the registration. A house you build yourself, or with subcontractors and no accredited general contractor, has none of that protection: no deposit reimbursement, no completion, none of the 1, 3 and 5-year periods after acceptance. If you want the warranty, give the contract to an accredited contractor; otherwise your protection is your contract with each trade, your inspections and your builder's risk insurance. Our page GCR warranty details what you will not have.

The budget that holds

Land, permit and connections, surveyor and plans, foundations, structure, envelope, mechanical, finishing, landscaping, sales taxes on materials and work, construction loan interest, builder's risk insurance, contingency reserve, and the welcome tax on the land (our page welcome tax on land). The item everyone forgets is double housing: you pay your rent or your current mortgage during the build. Our mortgage calculator (in French) turns the final loan into a monthly payment.

Frequently asked questions

What down payment for a self-build?

It depends on the lender and the estimated final value of the house; land already paid for often counts toward the down payment. Ask two lenders for the precise rule before buying the lot.

Is a construction loan more expensive than a mortgage?

During the build, you pay interest on the draws disbursed, plus inspection fees; afterwards, the loan is converted at an ordinary mortgage rate. The real cost is time: every month of construction is a month of interest and of double housing.

Is a self-build covered by the GCR warranty?

No, unless construction is entrusted to an accredited contractor who registers the building. Check the accreditation on garantiegcr.com before signing.

Sources: garantiegcr.com (buildings covered, fees paid by the contractor), revenuquebec.ca (GST rebate for the purchase or construction of a first home), Canada Revenue Agency (guide RC4028), read on 15 September 2026; draw practices of Canadian lenders. Informational page: your lender sets its conditions.

Our proof, not our promises

The Loaa & Manseur team, led by Lotfi Manseur and Loaa Al Daow, is the number 1 team at RE/MAX Platine in 2024 and 2025, 6th RE/MAX team in Quebec, 15th in Canada and in the global top 50 of large residential teams according to the official RE/MAX ranking, computed on actual transactions. Its Google profile counts more than 220 reviews with a 4.9 rating. Its offices are at 55 avenue de l'Équinoxe in Brossard, one bridge from the island, and every broker's licence can be checked in the OACIQ public register. Three things to verify yourself before calling us, and to demand of any other broker.

Also available in French: version française de ce guide.

Published September 7, 2026 by the Loaa & Manseur team, the number 1 team at RE/MAX Platine in 2024 and 2025, 6th RE/MAX team in Quebec, 15th in Canada and in the global top 50 according to the official RE/MAX ranking. Tell us about your project.