Ground-Up Construction Loans
Ground-up construction loans provide business-purpose financing for building an investment property from the ground up. Funds are typically released in stages tied to construction progress, and programs evaluate the project plan, budget, and borrower experience. Structure, terms, and eligibility vary by lender, project, and jurisdiction.
Who It's For
- Experienced investors building new investment properties
- Borrowers with a defined construction plan and budget
- Investors planning to sell or refinance after completion
Common Uses
- Financing new residential investment construction
- Funding a project in staged draws
- Building to sell or to refinance into permanent financing
Qualification Overview
- Construction programs generally focus on the project plan, budget, timeline, and borrower experience.
- Funds are typically disbursed in draws tied to progress.
- Requirements vary by program and investor.
Common Variables
- Construction budget and plan
- Borrower experience and liquidity
- Projected completed value support
- Project timeline and draw schedule
Eligible Property Types
- Eligible residential construction projects
- Certain multifamily projects (program-dependent)
Common Documentation
- Construction budget and plans
- Builder / project experience information
- Entity documents
Loan Purpose
Short-to-medium-term business-purpose financing for construction. Not a consumer mortgage.
Potential Advantages
- Staged draw structure aligned with construction progress
- Supports build-to-sell or build-to-refinance strategies
- Financing tailored to project timelines
Potential Considerations
- Construction carries timeline and cost-overrun risk
- Experience requirements are common
- A clear exit strategy is important
Frequently Asked Questions
- How are construction funds disbursed?
- Construction loan funds are typically released in draws tied to verified progress rather than all at once. Draw schedules and requirements vary by program.
Program details are general and for educational purposes only. This is not a commitment to lend, an offer, or specific loan terms. All programs are business-purpose investor loans subject to underwriting, property review, investor guidelines, and applicable law. Availability, eligibility, and terms vary by state and transaction. Simple DSCR is an assumed business name of WooHoo Mortgage LLC, NMLS #2347993.