Ground-Up Construction Loan

Overview

Ground-up construction loans finance the building of new product — single-family, 1-4 unit, or small commercial — for sale or rental. They fund the land (sometimes), hard costs, soft costs, and contingency, paid out in draws against completed work over a 12-24 month term.

Unlike owner-occupied construction-to-permanent loans, investor ground-up loans are short-term and asset-driven. The exit is either a sale or a refinance into a long-term DSCR or commercial loan once the property is built and stabilized. Lender selection is critical — different lenders have different appetites for product type, market, and sponsor experience.

Who it's for

Builders developing single-family or small multi-family product
Investors building 2-4 unit projects in infill markets
Lot owners with shovel-ready plans
Sponsors with a clear sale or refinance exit

What's typically reviewed

Approved plans, permits, and detailed budget
Licensed builder/GC with track record
Sponsor experience and liquidity
Land ownership or contract
Market analysis supporting the as-completed value

This is a general description, not a guarantee of approval. Specific requirements vary by lender and program. Final qualification is determined during underwriting.

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