New Construction Line of Credit
- New construction loans are not like traditional loans.
- They allow short term real estate investors to borrower capital to purchase lots, cash out on lots, and build a new home to sell for profit.
- The line of credit is based on liquidity and not be debt to income ratio. This loan is structured like the single family fix and flip and fix and flip line of credit.
- No income is required.
New Construction Loans
- Loan purpose: new construction loans for single family and multi –family properties up to 30 units.
- Loan size: $75,000 – $2,500,000
- Loan term: 9-12 months with extension available
- Rates/Fees: fixed, interest Only
- Land requirement: the land/lot must be fully entitled and developed (in accordance with proposed project) with all required utilities and road infrastructure
- Initial investment: 60% of the lesser of:
- (a) the appraised value of the land
- (b) or borrower’s cost basis in the land, until all applicable building permits are submitted.
- Once the borrower submits permits, we can advance an incremental 15% (from 60-75%)
- Max % of construction financing (LTC): 90%
- Max LTV (based on after repair/build value): 75%
- Minimum FICO 620
- Draws: multiple draws available at borrowers discretion
Qualifying for a New Construction Loans:
We use a Commercial Wholesale Lending Platform. Pricing is manual and begins by discussing experience, liquidity, credit, and completing an application form that will be evaluated by an underwriter to determine options.
Loans are subject to investor and business credit approval, appraisal and geographic location of the property and other underwriting criteria. Loan amounts and rates may vary depending on loan type, LTV, verification of application information and other risk based factors.