Getting new construction projects off the ground can be tough for investors, especially when traditional financing options fall short. Ground-up Construction loans offer a strategic solution, providing the flexibility needed for clients who are eager to break ground and build from scratch.
Ground-Up Construction Loans vs. Traditional Financing
Ground-Up Construction loans are tailored specifically for new construction projects. They work as short-term loans, releasing funds incrementally as the project progresses. This setup guarantees that funds are available exactly when needed, minimizes financial risks, and helps with cash flow management.
Traditional financing typically doesn’t support new construction loans due to several factors. Banks often require significant cash reserves, which builders may lack. Project timelines can exceed bank loan maturity limits, and paid-off lots are usually not recognized as assets. Additionally, many lenders restrict cash out or reimbursement for lot purchases. Smaller builders also struggle to meet the volume requirements needed to satisfy bank revenue goals, making traditional financing a less viable option for them.
More About Ground-Up Construction Loans
These loans are ideal for experienced builders or developers who are eager to start projects quickly without bank delays. They also support contractors with ready-to-build land needing immediate funds and cover various property types, including multifamily and single-family.
LendSure’s Ground-Up Construction Loans FAQ
Q: Who is eligible for LendSure’s Ground-Up Construction Loan Program?
A: Builders with a proven track record, having completed at least three new builds or a combination of two builds and a major renovation over $200,000, may qualify for this program.
Q: What costs are covered by the loan?
A: The loan covers both the cost of the lot and the construction expenses as outlined in approved plans. Builders can also receive reimbursement for up to 65% of the lot purchase price.
Q: What term options are available?
A: LendSure offers 12 and 18-month term options, both with Interest-Only payments.
Q: Is there flexibility in the first borrower payment?
A: Yes, you can delay the initial borrower payment for up to five months. LendSure allows the first four months of interest payments to be stacked into the loan for added cash-flow flexibility.
Q: How is LendSure’s Ground-Up Construction loan pricing determined?
A: Loan pricing is based on a review of the project details, the builder’s experience, assets, and creditworthiness.
Q: What is the maximum loan amount?
A: The loan can cover up to 85% of the construction costs as defined by plans and permits.
Q: Can loan origination fees be included in the loan?
A: Yes, loan origination fees can be financed into the loan, which reduces the upfront cash required.
Q: Are income documents required to qualify?
A: No, income documentation is not needed to qualify for this loan program.
Add Ground-Up Construction Loans To Your Loan Toolkit
Already offering our Fix and Flip financing? With Ground-Up Construction loans, you’ll also benefit from competitive rates, flexible terms, and opportunities for repeat business. As projects transition from construction to permanent structures, our financing can evolve into long-term solutions for end buyers, supporting ongoing business growth. Learn more about our program here.
The LendSure Way
It’s simple. We make loans that make sense. We’re not in-the-box lenders. Of course, there are numbers ratios, and data to consider, but we know that behind every file, there’s an individual with a unique circumstance seeking a loan. We work hard to offer our common-sense take on lending to borrowers seeking funding for the home of their dreams, another addition to their investment property portfolio, or refinancing of a currently-owned property.
Are you ready to benefit from a common-sense approach to lending? Contact us today to learn more about non-QM loans and how partnering with LendSure Mortgage Corp. can help grow your bottom line.
