Your client’s ready to build. They’ve got their eyes on the land and the plans ready to go, but the bank says “no.”
It’s a frustrating spot, especially with new construction still playing a key role in easing housing shortages. In April 2025, 1.41 million privately owned housing units were authorized by building permits. While that’s slightly down from earlier this year, the demand for new housing remains strong.
That’s where real estate construction loans make a difference. These flexible alternative loan solutions help brokers connect experienced investors to the capital they need to break ground without the usual lender delays.
What Is a Ground-Up Construction Loan?
A ground-up construction loan is a type of real estate construction loan that finances the building of a property from scratch, starting with either raw or entitled land. These loans are typically short-term and interest-only, structured to match the project’s construction timeline.
Instead of receiving the entire loan amount right away, borrowers access funds in stages (also referred to as draws), with disbursements tied to project milestones like foundation completion, framing, or inspections. The draw process ensures that money flows only when it’s needed, helping investors better manage cash flow throughout the build.
These types of real estate construction loans may also include financing for the land itself and are often used for:
- Single-family spec homes
- Build-to-rent projects
- Small multi-unit developments
Why Traditional Banks Say “No”
Traditional lenders can be a roadblock for ground-up construction. Banks tend to require significant cash reserves, full income documentation, and a long history of completed projects. They may undervalue already-paid-off lots or refuse to reimburse recent land purchases.
If your client is borrowing through an LLC or lacks a long builder resume, bank financing often isn’t an option at all. The result? Delays, declined applications, or deals that never get off the ground.
That’s why many experienced investors and brokers turn to real estate construction loans from non-bank lenders with more flexible approval criteria.
Benefits of LendSure’s Ground Up Construction Loan Program
LendSure’s ground up construction loan program is designed with brokers in mind. We work with builders who are ready to move and need financing that keeps up. Some key advantages include:
- Faster closings, typically within 25 to 45 days
- No income documentation required
- 12- or 18-month interest-only terms
- Financing for up to 60% of the lot purchase and 85% of construction costs
- Entity closings allowed for LLCs and business borrowers
- Draw schedules tied to third-party inspections
- Origination fees that can be rolled into the loan
- Delay the first borrower payment for up to five months
This kind of real estate construction loan gives your clients the freedom to focus on the build, not paperwork, delays, or rigid bank guidelines.
What to Consider Before Applying
While these loans offer flexibility, they do come with important requirements that brokers and borrowers should understand.
To qualify for LendSure’s real estate construction loan program, the borrower must have completed at least three new builds, or two builds and a major renovation over $200,000. A general contractor license is required, as well as permits from the local authority.
The minimum credit score is 680, and each construction draw comes with an inspection fee, typically between $150 and $250. Interest rates are typically higher than those of traditional financing, but the tradeoff is speed, accessibility, and far fewer hoops to jump through. In some edge cases, Dutch interest may be applied as a compensating factor when a file doesn’t meet standard underwriting requirements.
When Is a Ground-Up Construction Loan a Good Fit?
Real estate construction loans are ideal for experienced builders or investor clients who are ready to start construction but don’t have time to wait on the traditional loan process. If your client has already purchased land, is borrowing through an entity, or has non-traditional income, a real estate construction loan can offer a more realistic path to financing.
They’re also a smart play in high-demand markets. Cities like Austin, Raleigh, Boise, and Miami are seeing continued growth and inventory shortages. For builders in these areas, ground up construction loans can help them move faster, meet market demand, and realize a stronger return.
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 ground-up construction loans and how partnering with LendSure Mortgage Corp. can help grow your bottom line.
