Ground-Up Construction Financing
Financing consideration for qualifying non-owner-occupied residential construction projects—from eligible land acquisition through completed investment property.
Capital Structured Around the Construction Plan
Ground-up construction financing is designed for investment properties that will be built from the foundation forward. Unlike financing for a completed property, the review must account for land, plans, permits, construction costs, project timing and the expected completed value.
Eligible construction funds are generally held in reserve and released through a controlled draw process as verified work is completed.
Spec Home Construction
Build a qualifying residential property for resale after completion.
Build-to-Rent Projects
Construct a property intended for rental stabilization and refinance.
Land Acquisition and Build
Eligible land purchase and construction may be reviewed together.
Mid-Construction Completion
Selected incomplete projects may be considered after detailed review.
What We Review Before Identifying a Program
Construction eligibility depends on the complete project—not one isolated metric.
Land and Site
Ownership, acquisition price, existing debt, zoning, utilities, access, site readiness and environmental considerations.
Plans and Permits
Building plans, specifications, approvals, permitting status and whether the proposed improvements are legally buildable.
Construction Budget
Line-item hard and soft costs, labor, materials, permits, professional fees, financing costs and an appropriate contingency.
Borrower and Builder
Relevant completed projects, builder qualifications, credit, liquidity, entity structure and capacity to manage the build.
Completed Value
The supported value of the completed property in relation to land, construction cost, total project cost and requested financing.
Timeline and Exit
Project duration, interest and carrying costs, anticipated sale or lease-up timing, and the plan to repay or refinance the loan.
How the Land Enters the Transaction Matters
Land equity, acquisition cost and existing obligations can materially affect the construction financing structure.
Land Already Owned
Documented land equity may be considered when evaluating the borrower’s contribution, subject to valuation, title and program requirements.
Land Purchased at Closing
Eligible land acquisition and construction costs may be incorporated into one transaction when supported by the complete project.
Construction Already Started
Mid-construction projects require additional review of completed work, remaining cost, permits, liens, current value and funds already invested.
How Construction Funds Are Typically Released
Construction proceeds are generally distributed in stages rather than advanced as one lump sum at closing.
Approved Budget
The final construction budget and draw schedule establish eligible categories and planned disbursements.
Work Completed
The borrower or builder completes an approved phase of construction and prepares the draw request.
Progress Verified
An inspection or other verification confirms completed work before the requested funds are authorized.
Funds Released
Approved proceeds are released according to the lender’s draw procedures and required documentation.
Information That Helps Us Review the Project
A complete initial scenario allows potential issues to be identified earlier in the process.
Property and Project
- Property address and land acquisition details
- Current land ownership and existing debt
- Plans, specifications and square footage
- Permit and zoning status
- Detailed construction budget
- Construction timeline and draw schedule
- Expected completed value
- Sale, rental or refinance exit strategy
Borrower and Builder
- Borrowing entity and ownership structure
- Borrower credit and liquidity profile
- Schedule of completed construction projects
- Builder or general contractor information
- Builder experience and relevant project history
- Borrower funds already invested
- Available contingency and carrying-cost reserves
- Requested loan amount and closing timeline
Experience Can Affect the Available Structure
Construction introduces risks that do not exist with a completed property. Relevant experience helps demonstrate the ability to control the budget, manage contractors, navigate permits and complete the project on schedule.
Less-experienced borrowers may still have options, but leverage, liquidity requirements, project size, pricing or builder requirements may differ.
Submit Your Project ProfileFrom Project Submission to Construction Closing
Begin with the essential property, borrower and construction details. Additional documentation is collected as the transaction progresses.
Submit the Project
Provide the land position, project budget, requested financing, experience, timeline and exit strategy.
Review Potential Programs
We compare the scenario with available construction structures and identify questions or additional documentation.
Complete Due Diligence
The originating lender completes valuation, underwriting, title, budget review, documentation and final approval.
Ground-Up Construction FAQs
Important considerations before submitting a construction financing request.
Can the financing include the purchase of the land?
Eligible land acquisition may be considered as part of the construction transaction. The structure depends on the acquisition price, current value, total project cost, completed value, borrower contribution and applicable program requirements.
Can land equity count toward my required contribution?
Documented land equity may be considered under selected programs, subject to title, valuation, seasoning and transaction-specific requirements. It should not be assumed to replace every required borrower contribution.
Are construction funds provided at closing?
Construction funds are generally held in reserve and released through a controlled draw process as eligible work is completed and verified. The exact process varies by originating lender.
Can a first-time builder qualify?
Selected programs may consider less-experienced borrowers. Approval may depend on project size, borrower liquidity, credit, builder experience, leverage, contingency and the strength of the overall transaction.
Can an unfinished construction project be financed?
Selected mid-construction projects may be reviewed. Additional documentation is typically required concerning completed work, remaining cost, permits, inspections, liens, current value, existing debt and the reason the project requires new financing.
How much contingency should be included in the budget?
An appropriate contingency depends on the property, project scope, plans, material costs and construction risk. The originating lender determines whether the proposed contingency satisfies its program requirements.
Can I refinance into a rental loan after construction?
A completed property may potentially transition into long-term rental financing if it meets the applicable valuation, property, occupancy, rental-income, borrower and seasoning requirements. Future refinance approval is not guaranteed.
Does submitting a project create a commitment to lend?
No. A submission is a request for preliminary review only. Financing remains subject to available programs, property and borrower eligibility, due diligence, underwriting and final approval by the originating lender.
Ready to Discuss Your Construction Project?
Submit the land position, construction budget, borrower and builder experience, requested financing, timeline and exit strategy for a preliminary program review.