Constuction Financing

We are able to lend to a Loan to Value of 90% of land and construction costs to a maximum of 75% of the appraised value of the finished project. Should the borrower require, we can also arrange for private construction second mortgages up to 85% of the appraised value of the finished project.

Our typical borrower is an independent builder constructing 'spec' homes or multi-family projects. The term 'spec' refers to speculative in that the builder has no known purchaser when he commences construction. Because the house will be sold at completion, we do not require the borrower to qualify through debt service abilities. We are an equity lender. We do, however, require that the borrower demonstrate that they have the skills to successfully undertake the project.

If the borrower is going to live in the house (i.e. it is not spec), then we will need to see that they will be able to qualify for a conventional mortgage. Once the project is complete, the borrower is free to obtain a conventional mortgage at their bank or credit union. Of course, we would be pleased to assist clients in arranging such financing, should they choose.

Information we typically require in order to process a construction mortgage is as follows:

-standard loan application form including net worth statement
-3 yrs income verification via tax returns
-3 yrs corporate financial statements if the borrower is a company
-lot purchase agreement
-detailed construction budget
-construction blueprints
-estimate of the finished value of the project
-resume of the builder's qualifications to build
-construction contract to build (if the project is being built by a contractor)