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Ground-up construction loans.
Land plus vertical in one facility, drawn against a schedule of values agreed at closing. Contractor bids get reviewed before the loan funds, not discovered at the third draw.
How it works
The draw schedule is the loan.
A ground-up construction loan funds the land and the vertical build in one facility rather than a land loan you refinance later and hope somebody funds the build on. Underwriting reads the land, the plans, and the contractor's bid together, because a project is only as good as the numbers behind the least reviewed part of it.
The contractor's bid is read during underwriting rather than filed after closing. It gets broken into a schedule of values, meaning a dollar figure is agreed for every stage of the build before the first draw is requested. That document is what a draw is checked against later, so there is nothing to negotiate about what a stage was worth once it has already been built.
Money is released in draws against completed work, inspected and wired the same day the inspection clears. This is the mechanism that decides whether a framer or a plumber keeps showing up, because a build that stalls waiting on its own money is a build that costs more than the loan was sized for.
The exit, sale or refinance into longer-term debt, gets planned before closing rather than at the end of the build. A finished house with no financing plan behind it is a project with a deadline nobody priced.
What to bring
What this needs from you.
Required
- Land owned outright or under contract.
- Approved plans, and permits either issued or clearly close to it.
- A licensed contractor with a bid broken into a schedule of values.
- A stated exit: sale, or refinance into long-term debt once construction is complete.
- A meaningful contribution to total project cost. Land equity often satisfies part of this.
Terms, plainly
The whole box, before you ask.
Most lenders make you get on a call to learn this. Here it is.
| Amount | $150,000 to $1,000,000+ |
|---|---|
| Coverage | Land plus vertical construction in one facility |
| Rate and points | Set by credit, experience and the deal. Your number is in the term sheet. |
| Decision | 24 to 48 hours from a complete submission |
| Time to close | 10 to 14 days, subject to title clearance |
| Draws | Released against completed work per the schedule of values, inspected and wired same day |
| Contractor bids | Reviewed during underwriting, before the loan funds |
| Property types | Non-owner-occupied residential new construction, spec or built to sell |
Questions
Answered without the phone call.
Do you fund the land purchase, or only the build?
Both, in the same facility. Funding land and vertical separately is often where a builder discovers that a second lender values the project differently from the first.
How much construction experience is required?
Enough that the schedule is credible. A first ground-up build is fundable with the right licensed general contractor and a realistic timeline; the same build with no experienced GC behind it usually is not.
How are draws released?
Against completed work, inspected, and wired the same day the inspection clears. The schedule of values is agreed before closing so a draw is a check against a document both sides already signed.
Can you fund a spec build with no buyer lined up?
Yes, provided the finished value is supported by real comparables. Spec is fundable. A budget built on hoping the market moves is not.
What if my land is unencumbered and already owned?
That equity typically counts toward your required contribution to the project, which can mean less new cash needed at closing.
Guides
Written to go with this program.
Contractor bids: what a lender checks before funding a rehab
Bids get reviewed before close, not after. What that review is actually looking for, and why the cheapest bid is usually the one that fails it.
Ground-up construction loan requirements: what gets checked before the first shovel
A construction loan is underwritten on a budget and a schedule, not a house that exists yet. Here is what has to be in place before one funds.
How a construction draw schedule actually works
A build loan funds in stages against finished work. Here is how a draw schedule is set, what releases each payment, and where builds stall.
Who uses this
Depending on who you are.
Where
Lending is nationwide.
Lending is nationwide. The states below have their own page because they are where the most deals come from, not because they are the only places money goes. If your property is somewhere else, submit it anyway; the terms do not change with the postmark.
New Jersey, Pennsylvania, New York, Texas, Ohio, Indiana, North Carolina, South Carolina, Virginia, Maryland, Delaware. See all markets.
Submit a deal
Let's price it.
No credit pull, no obligation, and a real answer either way. If it is not a fit I will tell you why, and usually who to call instead.
- Terms in 24 to 48 hours
- Written, not verbal
- One person, start to finish
$150K to $1M+ · 10 to 14 days