Ground-Up Construction Loans — Private Money Financing for New Development Projects
Ground-up construction loans provide the capital needed to build new residential and commercial properties from scratch — from land acquisition and site preparation through vertical construction and completion. As a private money construction lender, we offer faster approvals, more flexible underwriting, and more responsive draw schedules than traditional bank construction loans.
What Are Ground-Up Construction Loans?
A ground-up construction loan — also called a new construction loan or land-and-construction loan — is a short-term financing product that funds the development of a new property on raw or improved land. Unlike renovation loans that fund repairs to existing structures, ground-up loans fund the entire construction process from foundation to finish.
Construction loans are funded in stages through a draw schedule — meaning loan proceeds are disbursed as construction milestones are completed, inspected, and approved. This protects both the lender and the borrower by ensuring funds are deployed against completed work.
Project Types We Finance
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Single-family residential new construction — custom homes, spec homes, builder inventory
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2–4 unit residential new construction
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Multifamily new construction — apartment buildings and condo projects
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Mixed-use development — retail/residential and office/residential combinations
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Commercial new construction — office, retail, industrial, and warehouse projects
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Townhome and planned unit development (PUD) construction
Ground-Up Construction Loan Terms & Rates
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Interest Rates: 10% – 13%
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Loan Terms: 12–24 months (extensions available for larger projects)
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Loan-to-Cost (LTC): Up to 80–85% of total project cost
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LTV at Completion: Up to 70–75% of as-completed value
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Land Coverage: Many programs cover existing land equity
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Interest Reserve: Can be built into loan structure
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Payment: Interest-only on drawn balance
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Points: 1.5–3 origination points
How Construction Draw Schedules Work
Construction draws are disbursements from the loan that are released as construction milestones are completed. Rather than receiving the full loan amount at closing, the borrower draws funds incrementally as each phase of construction is finished and verified.
Our responsive draw process is designed to keep your project moving. We process draw requests quickly — typically within 2–5 business days — so you can pay contractors and keep construction on schedule without waiting weeks for bank approval.
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Submit a draw request with supporting documentation (contractor invoices, inspection reports)
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Our team reviews and approves the draw
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Funds are wired directly to the designated account
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Interest accrues only on the drawn balance — not the full loan amount
Underwriting Ground-Up Projects
Our ground-up construction underwriting focuses on three key areas: (1) as-completed value supported by a construction appraisal, (2) total project budget reviewed for completeness and market appropriateness, and (3) developer and contractor experience. We work with both experienced developers and qualified first-time builders with the right team in place.
Ground-Up Construction FAQ
Do you fund land acquisition as part of the construction loan?
Yes — in many cases our construction loans can include the land acquisition or can be structured around existing land equity. Contact our team with your project details for a custom quote.
What documentation is required?
Typical documentation includes: project plans and specifications, contractor budget and GC information, land purchase agreement or title, construction timeline, and borrower background information. We work to minimize documentation burden while ensuring deal viability.
Can you convert to permanent financing at completion?
Yes — once construction is complete and the property is occupied or leased, many borrowers refinance into our 30-year DSCR loan program or a bridge loan. We can pre-plan your exit strategy at loan origination.