How to get a construction loan in this new economy

"I want to build a home, but can't get a construction loan. What should I do?"

Many banks have gotten out of construction lending, or are charging very high rates when they make a loan.  Banks have gotten burned.  Regulators keep regulating.  They now require banks to keep larger loan-loss reserves, and are further diminishing the lien rights of banks in foreclosure situations.  So what's a qualified borrower to do?

Answer: find an long-time, established local builder who survived the downturn, and has good relationships with at least one local bank. Chances are that that bank will make both a construction loan and an end loan in a pre-sold situation, because of their good relationship with the builder.