Just did this in April 2010 in CT. A lot of banks don't do them and their rates and packages vary wildly. They're considered high-risk loans and I think it's MUCH harder to get a construction loan than other kinds of loans. I don't know what score you need--I was in the 8s and lucky enough to have a lot of equity on the property. I needed to show that I had 10% of the construction costs in cash and on hand for overruns. Just about everyone requires you to show 10% cost overrun in savings. I also got nailed for 0.25 point above their 30-year rates at the time, which was just what this particular bank did. Others don't let you lock in or give you the same rate for a construction-to-permanent. My advice is to go with the local bank.
In hindsight if I could possibly have done a refi or a home equity loan I might have. Mine was a tear down and rebuild. Once the loan closed, though, no problems. Though my credit has taken a hit after this.
Good luck!
