Construction Loans
Construction Loans
Our Construction Loans provide builders and investors the financing they need for ground-up construction and land acquisition.
LOAN PURPOSE:
- Ground-up construction loans for developers and investors building 1-5 properties at a time.
- Lot financing can be included, if lots are in build-ready condition.
- Program includes exposure limit (LOC) for experienced large volume investors, with options for inexperienced investors.
INTEREST RATE: Contact us for more info!
LOAN AMOUNT:
- $100K minimum.
- Single Unit up to $1MM / Multi-Unit (2+) up to $1.5MM.
TERM: 12 months (standard), with optional extensions.
BORROWER TYPE: Individual or Entity
MINIMUM EXPERIENCE: Minimum (1) New Construction experience for max leverage or (1) Fix & Flip experience for reduced leverage. Experience is based on a 36 month lookback period.
MAXIMUM LOAN-TO-VALUE (LTV): Single Unit: up to 70% LTV / Multi-Unit (2+): up to 65% LTV.
MAXIMUM LOAN-TO-COST (LTC): Single Unit: up to 85% LTC / Multi-Unit (2+): up to 80% LTC.
WHEN DO WE USE LTV VS LTC? Generally, we use the lesser of LTV or LTC calculation.
REHAB/CONSTRUCTION FINANCING: Funding up to 100% construction budget up to % Approved LTV of Total Cost.
FOREIGN NATIONALS:
Not allowed from ineligible country list.
Limited to: 85% LTC / 70% LTV max.
PROPERTY TYPES:
Non-Owner Occupied:
- Single Family Residences (SFR).
- 2-4 unit properties.
- Multi-family 5-20 unit properties.
- Mixed-use.
- Detached or townhouse style condos.
FAQ's on Construction Loans
Do I need experience building?
No, all you need is to prove you have owned or currently own a rental property. We do work closely with lenders that may alow you to hire the builder and use his experience to qualify. Additional conditions may apply to this type of loan.
How much money down do I need to get approved for a construction loan?
Typically, you will need between 25%-30% down. However, if you own the land or lot free and clear or partially, you may use the appraised value as collatarel to cover the down payment and closing costs.
How does the builder get paid on these loans?
The builder will be paid In draws and proportionate to the work completed. The lender will require a physical inspection of the work and copies of permits, certiicate of occupancy or other items required per county. Most builders opt to have between 3-5 draws max.
What happens if my costs to build increase after closing the loan?
Most lenders may require you pay the difference out of pocket. If a lender decides to increase your loan amount, this will require modification and could be costly.
832 301 6541
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Figure: 7 TAC § 80.200(b) CONSUMER WISHING TO FILE A COMPLAINT AGAINST A COMPANY OR A RESIDENTIAL MORTGAGE LOAN ORIGINATOR SHOULD COMPLETE AND SEND A COMPLAINT FORM TO THE TEXAS DEPARTMENT OF SAVINGS AND MORTGAGE LENDING, 2601 NORTH LAMAR, SUITE 201, AUSTIN, TEXAS 78705. COMPLAINT FORMS AND INSTRUCTIONS MAY BE OBTAINED FROM THE DEPARTMENT WEBSITE AT WWW.SML.TEXAS.GOV. A TOLL-FREE CONSUMER HOTLINE IS AVAILABLE AT 1-877-276-5550. THE DEPARTMENT MAINTAINS A RECOVERY FUND TO MAKE PAYMENTS OF CERTAIN ACTUAL OUT OF POCKET DAMAGES SUSTAINED BY BORROWERS CAUSED BY ACTS OF LICENSED RESIDENTIAL MORTGAGE LOAN ORIGINATORS. A WRITTEN APPLICATION FOR REIMBURSEMENT FROM THE RECOVERY FUND MUST BE FILED WITH AND INVESTIGATED BY THE DEPARTMENT PRIOR TO THE PAYMENT OF A CLAIM. FOR MORE INFORMATION ABOUT THE RECOVERY FUND, PLEASE CONSULT THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV.
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