Raleigh and the surrounding Triangle region have been among the fastest-growing metro areas in the country. Steady job growth from Research Triangle Park, three major universities and a strong healthcare sector keeps demand high for new homes, both to buy and to rent.
For investors, that creates room for spec homes, build-to-rent houses and infill projects on older lots inside the Beltline. This guide covers how ground-up construction financing works for Raleigh-area projects and what local rules to plan for.
How Ground-Up Construction Financing Works
A ground-up construction loan is short-term, business-purpose financing for building a new investment property. The lender funds the lot purchase, when there is one, and then releases construction money in draws as each phase of work is completed and inspected.
On qualified projects, the program Borrowers Capital offers access to can finance:
- Up to 100% of the land purchase
- Up to 100% of the approved construction budget
- Up to 75% of as-completed value, which caps the total loan
Qualification starts at a 600 credit score and one completed project of the same type. Loans go up to $3 million, with larger projects considered by exception. You will also need verified liquidity of roughly 10% of the construction budget, plus six months of payments, plus closing costs and third-party fees. For the full walkthrough, see Ground-Up Construction Loans: How 100% Land and Build Financing Works.
A Raleigh-Area Example
| Item | Amount |
|---|---|
| Infill lot | $140,000 |
| Construction budget | $400,000 |
| Total project cost | $540,000 |
| Appraised completed value | $760,000 |
| 75% of completed value | $570,000 |
The land and build fit under the value cap with about $30,000 of room. Lot prices inside Raleigh can be high, so the finished value has to justify what you pay for the dirt. Lots in growing towns like Wake Forest, Fuquay-Varina, Clayton or Knightdale may cost less, but check utility access and site costs carefully.
Raleigh-Specific Details to Plan For
Who issues your permit
Projects inside Raleigh city limits are permitted by the City of Raleigh through its online Permit and Development Portal. Unincorporated parts of Wake County are handled by Wake County Permits and Inspections, and towns such as Cary, Apex, Holly Springs and Wake Forest run their own permitting. Confirm the jurisdiction before you buy. A Raleigh mailing address does not always mean a City of Raleigh permit.
What Raleigh asks for on a new home
For a new single-family home, the City of Raleigh asks for a residential permit application, a site plan or survey, construction drawings, contractor information and lien agent information. A few items can add time or cost:
- Historic districts require a Certificate of Appropriateness before a permit.
- Wells or septic systems need Wake County approval.
- Lot grading plans are required when a project adds 800 square feet or more of impervious surface or directs runoff into a pipe or channel.
- Infill standards can apply on lots in established neighborhoods.
Build those steps into your schedule, because your lender’s draw schedule and interest carry depend on how fast you can start.
North Carolina contractor licensing
North Carolina requires a general contractor license from the NC Licensing Board for General Contractors for projects of $40,000 or more. License tiers cap the size of a single project: Limited up to $750,000, Intermediate up to $1.5 million and Unlimited with no cap. Make sure your builder’s tier covers your contract amount.
Closing costs
North Carolina charges an excise tax on deeds of $1 per $500 of value, normally paid by the seller. Closings are typically handled by an attorney. Include attorney fees, title insurance and recording costs in your liquidity plan.
What a Strong Submission Includes
- Lot contract or deed, plus a survey
- Plans, specifications and permit status
- A line-item hard- and soft-cost budget with contingency
- Builder license (with tier), insurance and project history
- Comparable new-construction sales nearby
- A clear exit: sale, rental, or refinance into a long-term DSCR loan
See the Investment Property Loan Document Checklist for the full list. Building in Charlotte instead? Read Ground-Up Construction Loans in Charlotte, NC.
Price Your Raleigh Build
Enter your lot cost, budget and expected value in the 100% Financing Calculator for an instant estimate, or learn more about our ground-up construction program. When you’re ready, submit your project for a preliminary review.
Sources: City of Raleigh: Building a New Single-Family Dwelling or Duplex, NC General Statutes, Article 8E (Excise Tax on Conveyances).
Disclosure
Borrowers Capital LLC provides access to business-purpose real estate financing through correspondent and private lending channels. Program availability, leverage, pricing, fees, loan amounts and approval requirements vary by transaction and are subject to applicable lender guidelines, borrower and property eligibility, valuation, due diligence, underwriting and final approval. References to 100% financing describe the potential financing of eligible project costs and do not guarantee a zero-cash transaction or loan approval. Borrowers Capital LLC may receive compensation in connection with arranging a transaction. This article is general information and does not constitute a commitment to lend, an offer of credit, or financial, legal or tax advice.