01
From flipping
Completed rehabs on title. Your record qualifies; the build process is the new part.
What changes →Ground-up construction · Investment property only
Land, permits, and a build schedule.
A construction loan funds the land and the vertical build together, released against a draw schedule as an inspector signs off each stage. You pay interest only on what has been drawn, and the loan is repaid when the property sells or refinances into permanent debt.
- Loan size
- $250K – $20M
- Loan to cost
- 75 – 80%
- Loan to completed value
- 65%
- Term
- 12 - 24 mo
- To close
- 30 days
Indicative market ranges. These are typical terms for this product across the private lending market, not an offer from a named source. Our approved construction source on the panel starts at $1M and underwrites an established track record, so a first ground-up below that is reviewed and quoted individually rather than run through the panel. Nothing here is an offer of credit or a commitment to lend.
Loan to cost is tiered on completed projects and the maximum is held for repeat builders; a first ground-up sits at the bottom of that range. Land must be zoned for the use and utilities lateral-ready. Figures reflect the terms available on our panel today and change as sources are added; nothing here is an offer of credit or a commitment to lend.
Where you are coming in from
Four routes into a first construction loan.
Our sources accept ground-up experience held on title, experience as a general contractor, or a fix and flip record. Three of the four routes below already qualify on that test.
02
From contracting
You build for other people. The experience test is already met — the ownership side is not.
What changes →03
Building to rent
Holding, not selling. The exit is a DSCR refinance, and that changes the underwriting.
What changes →04
Already developing
You know the process. You want leverage, a real draw cycle, and certainty of close.
What changes →01 · From flipping
Your flip record is the experience test.
Sources accept a fix and flip history as qualifying experience for ground-up. What you are missing is not credibility — it is the build process itself.
What carries over
Completed projects on title, an exit history, contractor relationships, and the habit of underwriting to a resale value rather than a cost.
What is new
Permits and stamped plans before funding. A construction schedule the builder produced. Draws released against inspection on a slower cycle than a rehab, and a term measured in 19 to 24 months rather than 12.
What costs more
Equity goes in earlier and stays in longer. Loan to cost on a first ground-up sits at the bottom of the range, and the land often has to be covered before the first draw releases.
02 · From contracting
You already pass the part most borrowers fail.
Experience as a general contractor qualifies on its own. The gap is on the ownership side, and it is a documentation gap rather than a credibility one.
What carries over
Vertical build experience, a licence, subcontractors, and a schedule you can defend line by line. This is the thing construction lenders underwrite hardest and the thing flippers do not have.
What is new
Borrowing as principal rather than being paid as the builder. An entity, a balance sheet, a schedule of real estate owned, and a track record of projects you owned rather than projects you built.
The structural question
Building on your own account with your own licensed company is possible with some sources, at reduced leverage and heavier documentation. A third-party general contractor under contract is the cleaner file and prices better.
03 · Building to rent
The exit is a refinance, not a sale.
A build-to-rent file is underwritten twice — once on the construction, once on what it will support as a rental. Both have to work before anyone funds the first draw.
What changes in underwriting
The completed-value test still runs on sale comparables, but the source also wants to see the stabilised rent and a DSCR takeout that clears. A build that appraises and does not carry itself is a decline.
Line up the takeout first
Arrange the DSCR refinance before breaking ground, not after certificate of occupancy. Rates move over a 19 month build, and a takeout you assumed rather than quoted is the most common way these projects get stuck. DSCR terms →
What it buys you
Basis. You own the asset at construction cost rather than at market, which is the whole reason to build a rental instead of buying one.
04 · Already developing
You do not need the process explained.
At this level the file is clean and the questions are narrower: how much leverage, how fast the draws clear, and whether the source closes on the date it said.
Leverage
Loan to cost reaches its maximum on a record of completed projects. That is the whole tier — the difference between the bottom and the top of the range is equity you do not have to put in.
Draw cycle
Time between inspection and funding is the number that decides whether your subs stay on the job. Our panel funds draws in as little as 24 hours, and we track actual turnaround per source rather than the published figure.
Above $5M
The source list shortens sharply and terms stop being published. Different market, different process. Developers →
What actually changes
Everything you know about a rehab loan stops applying.
Fix & flip loan
Ground-up loan
Sized against
Purchase + rehab, capped by ARV
Total project cost, capped by completed value — and the cap is tighter
Typical leverage
80–90% purchase by track record / 100% rehab / 70% LTARV
75% of cost at two completed projects, 78% at three, 80% at five / 65% of completed value
Your equity
Mostly the down payment
Land equity plus a share of every draw. Some sources advance against the land at closing; others require it owned free and clear first
Term
12 – 24 months
18 – 36 months, and it will run long
Draws
By line item, fast inspections
By construction schedule, with a lender-side inspector and slower releases
Underwrites
The property, mostly
The sponsor, the builder, and the plan set — in that order
Wants to see
Comps and a rehab budget
Permits, stamped plans, a GC contract, and a real schedule
Time to close
~10 days
~30 days, and the clock starts when the plans are complete
A ground-up decline from a flip lender is a product gap.
Two of the four capital sources on our panel that fund fix & flip also write ground-up construction. The other two decline every construction file regardless of the sponsor or the project, and the decline is not usually stated in those terms.
Calculator
Build feasibility & cash to close
Ground-up sizing, the equity required before the first draw, and what is due at closing.
The project
$
If already owned free and clear, enter what you paid.
$
Construction contract — labour and materials.
$
Permits, plans, engineering, impact fees, builder's risk.
$
Supported by comparable sales, not by cost.
Lender terms
Ground-up leverage is tiered on track record: 75% of cost at two completed projects, 78% at three, 80% at five. Set it to match a term sheet you are holding.
Both structures are common and they move the same equity to different dates. Set it to match the term sheet.
Day-one costs
Percent of land cost.
$
$
Carry & reserves
Agent, closing, concessions.
Feasibility
$889,200
Total loan commitment
- Total loan commitment
- $889,200
- Advanced at closing
- $250,000
- Construction holdback, drawn later
- $639,200
- Loan to cost
- 78%
- Loan to completed value
- 54%
- Land covered at closing
- 100%
- Margin, cost to completed value
- 24%
Cash to close — day one
- Land equity
- $0
- Lender points
- $17,784
- Placement fee (your assumption)
- $8,892
- Title, settlement & recording
- $3,000
- Appraisal, plans review, legal
- $6,500
- Prepaid insurance & taxes
- $5,500
- Cash to close
- $41,676
And after closing
- Sponsor equity through the draws
- $250,800
- Total cash committed
- $292,476
- Each draw, funded before reimbursement
- $148,333
- Peak cash out, mid-draw
- $399,009
- Liquid reserves to show
- $48,906
The return
- Total project cost
- $1,254,775
- Net sale proceeds
- $1,551,000
- Projected profit
- $296,225
- Return on cash in
- 101%
Cost is binding. At 78% of a $1,140,000 cost basis the loan caps at $889,200, while the completed value would carry $1,072,500. 78% at three; 80% at five.
Land. $250,000 of the $250,000 land cost is advanced at closing, leaving $0 of land equity on day one. Switching the land position to free-and-clear moves $250,000 from the draws to closing — same total, $250,000 sooner.
$41,676 at closing, $292,476 committed in total. Each of the 6 draws is funded in full — $148,333 — and inspected before $106,533 of it is reimbursed, so peak cash out is $399,009. Construction draws are inspected on a slower cycle than rehab draws.
Reserves: $48,906. Verified at closing and separate from cash to close.
Illustrative arithmetic only. Not an offer of credit, a pre-qualification, a commitment to lend, or an appraisal of value. Financing costs are your own assumption — lender points and our placement fee are quoted per deal, disclosed in writing on every term sheet, and never guessed at here. Interest carried over the hold is not included.
Get real term sheetsMaking the jump
What a construction lender requires.
You've finished things
Addresses, scope, timelines and sale prices for prior projects. Leverage is tiered on the count: 75% of cost at two completed projects, 78% at three, 80% at five.
Someone competent is building
A licensed general contractor under contract, with their own project history. Owner-builder on a first ground-up is declined by every source on our panel.
The plan is real
Permits issued or in process, stamped plans, a line-itemed budget with contingency, and a construction schedule prepared by the builder.