/PROGRAM · Business purpose
Construction loans for builders
A rigid or slow draw process costs you schedule and leaves subs standing around waiting on money. And when a deal doesn’t fit the bank’s box (an unusual lot, a spec that has sat past maturity, a fourplex too small for a commercial desk), most builders don’t have a second option lined up.
- Scope
- Business-purpose loan. Available in any state. Not for owner-occupied properties.
- Best if
- you build for a living and the draw schedule is the bottleneck.
- Not for
- a home you’ll live in, including one you’re acting as your own GC on.
- First step
- Send the project, the lot, the plans, the budget, and where the current financing stands.
Financing for builders and developers during the build: construction lines, spec and bridge financing, cash-out on nearly-complete homes, and small multifamily or build-to-rent. Plus a no-strings relationship, so your buyers have someone reliable for the purchase loan once the home is done.
Who a builder loan is for
Custom builder or GC
Three to ten contract builds a year, and a draw schedule you can’t afford to have slow down.
Spec builder carrying inventory
A finished house sitting past the construction loan’s maturity, choking off capital for the next build.
Small multifamily or BTR developer
Duplex-to-fourplex infill or a small build-to-rent pod, too small for a commercial desk, too unusual for a standard DSCR shop.
Developer selling to retail buyers
Units going one at a time to individual buyers who each need financing lined up so the sellout doesn’t stall.
How a builder loan works
- 01
Send the project, the lot, the plans, the budget, and where the current financing stands.
- 02
Builder and developer files are business-purpose and available in any state.
- 03
The build has to be for sale or for rent. A home you intend to live in is not eligible here, even if you are your own GC.
- 04
If the exit is to hold and rent, we line the takeout up alongside the construction piece instead of starting over later.
Questions about a builder loan
My bank already handles my construction draws.
Fair enough, if the draws are fast and the terms work for you. Plenty of builders just keep me in the back pocket for when a deal doesn’t fit the bank’s box or the draw turnaround slows down. No ask to switch anything.
My construction loan converts to perm automatically. I don’t need a bridge.
Good. If a spec ever sits past the maturity, or the conversion terms stop making sense once it’s listed, that’s usually when builders call.
Bridge financing is expensive. I’d rather wait it out.
That’s scenario-specific: it depends what carrying cost looks like against bridge cost. Worth running the numbers as you approach the maturity date, so you’re deciding ahead of the deadline instead of under it.
Multifamily this small isn’t worth a lender’s time.
That’s exactly the gap I work in. A fourplex or a small build-to-rent pod is too small for the big commercial shops and outside the box for a typical DSCR lender.
I’m building my own house and acting as my own GC. Does this cover me?
Not this program. It’s for builders and developers building for sale or for rent. A home you’ll live in is an owner-occupied construction loan, which is a different conversation.
Related reading
All guides →Send this scenario
Tell me the property and the plan and I’ll come back with what’s eligible. Eligibility and terms vary by scenario.