Loans · Ground-up construction
Ground-up construction loans
Money to build new homes, townhomes and spec projects, paid out as you build.
At a glance
When a ground-up construction loan fits
Best forSpec homes, build-to-rent and small new-construction projects
What sizes the loanTotal project cost (land plus build) and the finished value
How it is paidIn draws, after each stage is complete and inspected
Land you ownWith many lenders, its value can count toward your equity
ExitSale of the finished homes, or a refinance into a rental loan
Who it fitsBuilders and investors with plans, a budget and a builder in place
Worked example
How land you own can work as your down payment
| Example deal | Figure |
|---|---|
| Land value (appraised) | $200,000 |
| Build budget, including soft costs | $600,000 |
| Total project cost | $800,000 |
| Loan request | $680,000 |
| Loan-to-cost | 85% |
| Your equity | The land, plus any costs paid before closing |
Example onlyLenders differ on how they credit land and whether interest during construction can be built into the loan. Costs before closing, such as survey, design and permits, are paid by you and may be reimbursed at closing. Lender terms confirm all of this. These figures illustrate the math. They are not an offer, a rate quote or a promise of approval.
Your file
What to have ready
- Plans and an itemized construction budget
- Permits, or where they stand
- Builder's license, insurance and contact
- Land deed or purchase contract
- Your track record for the last 36 months
- Entity documents, guarantor ID, 2 months of business bank statements
How we place it
Options in 48 business hours
Once your file is complete, we send it to the lenders in our directory that fund this kind of deal. Their answers come back to you on one page, side by side, with our fee in writing.
Questions
What investors ask us
Can I use land I already own as my down payment?
With many lenders, yes. The land's value counts toward your equity in the project. Each lender sets its own rules, which we compare for you.
Do I have to use a specific builder?
No. You can use any qualified builder. We can point you to builders we have worked with, and you are never tied to one.
Can you help before I have plans?
Yes. Ask us about a feasibility study, which lays out what your land can support and what it might cost and earn.
Related loans
Other ways to finance it
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