top of page

New Construction & Development

Develop and Sell

No matter the size of your building construction company, financing for new construction on ready-to-build projects may be available. These short-term ground up construction loans can be utilized by spec builders on a small scale, production builders on medium-sized real estate projects up to sophisticated developers on very large projects.

Brainstorming
New Construction & Development: Service

Smaller New Construction Projects

The new construction loan for smaller projects typically have the following characteristics:

  • property types: single-family homes, townhouses, 2-4 unit residences

  • terms are covering the construction build period from 1-2 years

  • interest only payments with no prepayment penalties

  • loan amounts from $75K to $2.5M

  • maximum loan sizes up to 70% LTV and 90% LTC

  • both hard and soft costs directly related to the build can be financed

  • non-recourse for experienced builders

If the builder would like to retain ownership of the property upon completion in order to hold as a rental property, this is also possible. This short-term loan would require interest only payments during the construction period and then convert to a long-term rental loan. Maximum loan sizes may be smaller up to $1M and full recourse options only.

New Construction & Development: Text

Larger New Construction Projects/Developments

The new construction loan for larger projects typically have the following characteristics:

  • property types: large residential developments (e.g. multi-family complexes and communities), senior living, office, industrial, and retail on land already entitled

  • terms are covering the construction build period from 1-5 years

  • interest only payments with no prepayment penalties

  • loan amounts from $2.5M to $50M

  • maximum loan sizes up to 85% LTC and also minimum debt service coverage of 1.25x

  • previous development experience required as well as net worth and credit qualifications

The loan can also have a permanent option if there is intent to hold the large development after completion as an income-producing asset. 

If you are a business owner wanting to finance new construction of a building for your business (i.e. at least 51% of space to be occupied by your operation), SBA loans for this purpose are available under the section 7(a) and 504 programs. For more info, visit the SBA loan page.

New Construction & Development: Text
bottom of page