Ground-Up Construction Financing for Residential Developers

A ground-up construction loan is short-term, interest-only financing to build a new property on land, rather than renovate an existing one. Funds are released in draws as the build progresses, terms run 12-36 months, and the loan is repaid by selling the finished property or refinancing it.

This program is built for sponsors with completed construction projects, and experience is a core underwriting requirement. Newer developers often build a track record on fix-and-flip or renovation projects first, or partner with an experienced builder and a licensed general contractor. Tell us about your deal and we will say plainly whether it fits.

Leverage is sized on total cost, confirmed per deal. The sponsor equity requirement depends on the project and underwriting.

Yes. Eligible projects include townhome and attached residential development, new single-family homes, small multifamily of 2-12 units, suburban infill and build-to-rent communities.

Rather than funding the full loan at closing, construction loan proceeds are disbursed in stages (draws) as project milestones are met. A third-party inspector verifies work completion before each draw is released. Interest accrues only on the drawn balance.

LTC (loan-to-cost) is the ratio of the loan amount to the total project cost, including land, hard costs, soft costs, and financing costs. Leverage and the sponsor equity requirement are confirmed per deal.

Land acquisition can be included within total project cost for eligible projects where construction starts immediately. Stand-alone land loans without a defined construction plan are generally not available under this program.

Exit strategies include sale of the completed property or refinance into a DSCR loan to hold it as a rental.