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Ground-up construction loans for investment property in Texas.
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.
This market
What changes in Texas.
Texas has real ground-up volume, which cuts both ways for a builder. There is genuine demand for new product and there are experienced subcontractors who have built it before, and there is also competition for those subcontractors that turns a schedule into a negotiation. A build timeline here is a forecast about labour availability as much as about the work itself.
That is exactly why the draw matters more than the rate. Interest accrues on the drawn balance, so the expensive months are the last ones, and a build that loses six weeks waiting on a crew pays for that delay at the highest balance it will ever carry. A lender who inspects and wires the same day is not offering a convenience; they are removing one of the two things that stall a Texas build.
The other is the budget itself, which is why bids get read during underwriting rather than filed. A schedule of values agreed before closing means each draw is a check against a document both sides already signed, instead of a conversation about what framing was worth after it has been framed.
The instrument
The draw schedule is the loan.
The full detail is on the ground-up construction page. Nothing about it is restricted by state.
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.
Terms
What is on the table.
| 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
About Texas.
Do you only write ground-up construction loans in Texas?
No. Lending is nationwide and this instrument is not restricted by state. Texas has its own page because it is one of the markets these deals most often come from.
Which parts of Texas do you lend in?
All of it. The most active markets are Houston, Dallas, Fort Worth, San Antonio, Austin, which is where the deals have come from rather than a service area.
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.
Elsewhere
Not in Texas?
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.
More about this market on the Texas page, and about the instrument on the ground-up construction page.
Other instruments: Fix and flip, BRRRR, DSCR purchase and refinance, Rental portfolio refinance, Wholesaler transactional funding.
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