Construction Loans That Meet Your Needs!
There’s nothing more frustrating than finding the right land for a new development only to have a slow lender miss your deadline because they don’t understand the parameters or there is too much red tape. That’s why you’ll be assigned a lending expert that specializes in new construction loans specific to where your project is located.
Whether you’re planning on starting fresh with a shovel-ready development or tearing down an existing structure to start from scratch, we’ll be able to help expedite the funding process. Your dedicated loan expert will be available to answer questions, help you gather the right documents, and keep you up to date throughout the closing process. Try getting that type of care and know-how from a bank.
With funding up to $5 million, free underwriting, and someone who understands your project and your needs, we’re ready to partner with you and knock your project out of the park. This can-do attitude paired with our low rates and fast closings have led us to become the largest hard money lender in DC, MD, and VA. Contact us today for a no-risk consultation and if you ’re ready to move forward, we can close many deals in as little as 2 business days.
Questions and Answers About New Construction Loans for Investors
What is a new construction loan?
This is a way to get funding so that you can build a new structure on either shovel-ready land (a property where no structure currently exists) or on a property that has an existing structure that you plan to tear down.
How long does it take to get one?
If you come prepared with the plans for the structure, appraisals, and permits, and everything checks out, your funding may be approved in as little as 48 hours with most experienced lenders. However, if something doesn’t check out or if additional documents or appraisals are required, the loan closing process can be significantly slowed. This is why it is important to ask the lender what documents they needed and make sure you have everything ready before submitting your application.
Can they be used to acquire land?
If you are looking for capital to fund a new construction project, but you plan to fund the construction costs yourself, a simple acquisition loan will work best. However, if you need funds for both the property purchase and building the structure, a new construction loan is best for you.
How much of the building costs will be covered?
Lenders will normally cover 100% of the cost to complete the structure with a new construction loan. When it comes to new construction, most lenders will only cover part of the land value, this percentage is heavily dependent on the results of an appraisal.
Why is the interest rate higher than other types of funding?
Unlike purchasing an owner-occupied home, these are shorter term loans on a property that has yet to be constructed. Do to the element of unforeseen complications during construction, the property is considered a higher risk until it has been completed. To address the higher risk, these loans will reflect a higher interest rate, just like any other hard money loan.
How many properties can I use it for?
New construction loans can be used for a single-family home, multiple detached homes, or even a single, multi-family property. However many properties you plan on building, make sure that your total project budget is realistic and that your lender has enough funds to get you to the finish line.
How long do I have until it needs to be paid back?
The typical loan term is 12 months, meaning that you have up until that time to pay back your lender. Depending on your lender, you may be able to secure an extension to your loan if you run into unforeseen problems such as materials or contractors becoming unavailable, or additional permits or inspections that need to be completed. Without an extension, most borrowers will have 1 year to pay back their loan or refinance out of it through another source of capital.