Ground-up construction
Land, budget, schedule and completed value.
The budget drives the draw schedule.
The partner broker organizes the costs, invested equity and draw schedule.
Book a callProject types
Conversion
Purchase, demolition, change of use and required work.
Expansion
Added space, budget and existing debt.
Phased project
Costs, draws and repayment for each phase.
Project completion
Remaining work, revised budget and expected repayment.
What lenders review
Complete budget
The budget covers land, construction, professional fees, interest and contingency.
Committed equity
Invested cash, eligible costs and the timing of contribution determine the draw order.
Cost to complete
After each inspection, remaining funds must cover unfinished work and known commitments.
After construction
The repayment plan identifies a sale or long-term financing.
What gives a lender pause
Cost overrun
Contingency, contracts and available cash must cover cost overruns.
Construction delay
Interest and commitments must remain payable if construction slows.
Incomplete permits
A draw may require a specific permit. Confirm its status before the first draw.
Permanent financing unavailable
Completed value is not enough without a documented sale, leasing plan or permanent loan.
What sets the terms
Amount basis
The amount depends on eligible cost and value. The lender uses the lower limit.
Funding
Completed work and invoices are reviewed before each advance.
Reserve
The reserve covers eligible cost changes without stopping construction.
Term
The term covers construction and the time required to sell or refinance.
Request steps
- Review the complete budget
- Confirm permits and contracts
- Document the equity contribution
- Plan the draw requests
- Update the cost of remaining work
- Prepare the sale or refinancing
What to prepare
- Plans, specifications, permits and schedule
- Detailed direct and indirect cost budget
- Construction contracts and principal bids
- Evidence of invested equity and sources of funds
- Current appraisal and value on completion
- Draw plan, contingency and permanent financing
Loan types
| Loan type | When this loan type may apply |
|---|---|
| Construction loan | Progress draws follow eligible costs, verified work and invested equity. |
| Construction-to-permanent | A permanent loan replaces construction financing when its conditions are met. |
| Pre-construction loan | It covers permits, plans and professional fees before the construction loan. |
| Project completion loan | The amount depends on remaining work, residual value and planned repayment. |
Preparing a request, step by step
All guides
Construction loan: draws by stage
Advances tied to progress, reports and legal holdbacks.
Construction budget: items to plan
Land, work, professionals, permits, fees and contingency.
Contingency: how much to set aside
Share of the budget set aside for site surprises.
Site supervision and reports
Visits, progress reports and who signs them.
Moving from construction loan to permanent loan
Conditions to meet, closing documents and the timeline.
Owner-built homes: what changes
Required experience, guarantees, advances and documents.
Common questions
When must equity be invested?+
The lender sets contribution order based on costs, land value and draw conditions.
How are draws authorized?+
A documented request, inspection and cost-to-complete confirmation generally precede each advance.
What does contingency cover?+
It covers eligible variance. It does not replace missing costs.
Can interest be financed?+
An interest reserve may be included when the budget, term and structure support it.
Will an incomplete permit stop financing?+
It may become a condition before signing or a draw.
How are presales or preleases treated?+
The lender reviews contracts, deposits, conditions and dates before counting them toward repayment.
Book a call about your construction project.
Costs, equity, permits, schedule and long-term financing.
Book a call