New construction
Ground-up construction loans
For builders putting up new homes: the loan funds the land and 100% of the construction budget, and up to six months of interest can be included.
- Land at 75%, construction at 100%
- Interest for up to 6 months included in the loan
- Teardowns, infill lots and lot splits
Got it. Thank you.
We’ll review your deal and call you back. If it’s urgent, call 310-654-1577.
Construction loan terms
- Land or purchase price
- Up to 75% 60% until permits are approved
- Construction budget
- 100%, released in draws
- Total project cost
- Up to 85% 90% with financed interest
- Loan vs. completed value
- 70% max
- Loan amount
- $50K – $3M
- Term
- 12 months, interest only 18–24 months available
- Credit score
- 680+
- Properties
- 1–4 unit homes, up to 2 per loan
Program maximums for new 1–4 unit residential construction. Not a commitment to lend. Program guidelines current as of November 2026.
What is a ground-up construction loan?
Ground-up construction financing is a short-term, interest-only loan for the land (or a teardown) plus the whole construction budget for new homes. The land is funded at closing, construction funds come out in draws after each stage is inspected, and you repay the loan when the homes sell or you refinance.
No permits yet? We can fund 60% of the land now and bring the advance up to 75% when permits are issued.
How much can I borrow to build?
Land up to 75% and construction up to 100%, capped at 85% of total project cost (90% with financed interest) and at 70% of the completed value. The smallest of the three applies:
| Example build | Amount |
|---|---|
| Land price (permits approved) | $350,000 |
| Construction budget | $450,000 |
| Total project cost | $800,000 |
| Completed value (ARV) | $1,200,000 |
| Land at 75%, construction at 100% | $262,500 + $450,000 = $712,500 |
| Total-cost cap: 85% of $800,000 | $680,000 |
| ARV cap: 70% of $1,200,000 | $840,000 |
| Maximum loan (lowest of the three) | $680,000 |
| Funded at closing for the land | $230,000 |
| Released in draws for construction | $450,000 |
| Your cash at closing | $120,000, plus closing costs and a one-month interest reserve |
Illustration only.
Who qualifies?
For builders with finished ground-up projects. Leverage doesn’t change with experience; experience sets the return the completed project has to show and the markets where you can build. A general contractor’s projects count if the permits were issued to their licensed company.
| Completed builds in 3 years | Leverage | Projected return on your cash | New market |
|---|---|---|---|
| 1–2 | Land 75%, construction 100%, total cost 85% | At least 20% | Not available |
| 3–4 | Same | At least 10% | Requires a general contractor agreement; leverage 5% lower |
| 5+ | Same | At least 10% | Requires a general contractor agreement; leverage 5% lower |
What you’ll need
- Building plans, elevations and a site plan
- Issued permits, or a letter from your architect if they’re still pending
- An itemized construction budget and your contract with the builder
- Your track record of completed ground-up projects
- Company documents and the cash for your equity, closing costs and interest reserve
What happens after you send a build
One contact from your first call until the loan is paid off.
- Send the dealThe address, the price, the budget, the sale price or rent, and the projects you’ve done. Send it by form or call; there’s no application at this point.
- Get a straight answerWhich loan fits and roughly how much it covers, before you spend money on an appraisal. If the deal doesn’t work, you’ll hear that too.
- Written termsWe run a soft credit check that doesn’t affect your score and send a term sheet. Then we order the appraisal and coordinate title, insurance and your company documents.
- Close in your LLCFunds go to escrow at closing. Rehab and construction money is released in draws as the work is done.
I’ve been on the builder’s side
My background is luxury residential development, so I look at a build like a builder: does the budget match the plans, how long will permits and construction really take, what will the homes sell for, and how much cash do you need until they sell.
Tell me about the lot, the permit status, the budget and the completed value, and I’ll size the loan before you spend money on an appraisal.
State rules for construction loans
- Available in the states we serve, except Lee, Charlotte, Sarasota and Collier counties in Florida.
- Florida and Travis, Harris and Bexar counties in Texas: 700+ credit, a completed build, about 5% less leverage and a 65% cap on completed value.
- Chicago (Cook County), Gary, Baltimore, Memphis, St. Louis and Cleveland: 700+ credit, a completed build, loans up to $1M.
- Building in a market that’s new to you: 3+ completed builds, 700+ credit and a GC agreement or letter of explanation.
- Building in California? You can also meet us in Burbank: ground-up construction loans in California at West Coast Capital Mortgage.
Questions about construction loans
Can construction financing start before permits are issued?
Yes. At closing the loan covers 60% of the land, rising to 75% after the permits are approved.
What equity does a build require?
Typically 15% of the total project cost, or 10% if interest is financed, plus closing costs.
Can I include interest in the loan?
Yes. Interest for up to six months can be financed in the loan.
How long is the term?
12 months interest-only; 18 to 24 months is available, and the term can be extended if construction takes longer.
Can one loan cover a lot split or several homes?
Yes. Two homes can go in one loan, lot splits included, and builders with more experience can finance bigger projects.
Can I refinance land I already own?
Often, yes, even when you bought the land before the permits came through.
How are renovation or construction funds paid out?
The budget stays in a holdback at closing and comes out in draws: you request one, an inspector checks the work and the money is released.
Can I rent the property out after the renovation?
Yes. Once it’s rented, refinance into a 30-year DSCR loan or a portfolio loan qualified on the rent.
Do I need an LLC or corporation?
Yes. Your LLC or corporation is the borrower, and you can form the entity before closing.
Which states do you lend in?
Many states. California, Florida and Texas are our main markets; for a property anywhere else, check availability: tell us the state and the loan you need, and we’ll confirm what’s available.
Other loan programs
Planning a build?
Share the lot, plans or permit status, budget and completed value to get the loan sized before you pay for an appraisal.