To fund a ground-up construction loan, a lender needs to see seven things: a builder with a track record, control of the land, plans and permits that are real or close, a detailed budget with contingency, a realistic schedule, enough cash for your share and your reserves, and an exit backed by comps or rents. Construction lending is riskier than lending on an existing house — there's nothing to fall back on until the building is done — so lenders look harder at the plan and the people behind it.
Our ground-up construction program funds up to 85% of project cost, up to 100% of the build, capped at 70% of completed value, $50K–$3M, 12–24 mo terms. Here's what we — and most construction lenders — need to see to get there.
1. A track record
Construction loans are the one place where experience isn't optional. Our program generally requires 1–2 builds. Every deal is still judged on its own merits.
What to show:
- Addresses of past builds, with photos.
- What each one cost to build versus its budget.
- How long each took versus the schedule.
- What each sold or rented for.
No ground-up builds yet? Major renovations count for something, but they're not the same as building from the dirt up. Partnering with an experienced builder — and putting their track record in front of the lender — is the usual path for a first project. So is finishing a few fix and flips first.
2. Control of the land
The lender needs to know you own the lot, or will at closing.
- Buying the land: the purchase contract.
- Already own it: the deed, and what you owe on it, if anything.
Land you own free and clear can be valuable here: its equity may count toward your share of the project. Land with a loan on it means that loan has to be paid off or subordinated — remember, the construction lender needs first lien position.
3. Plans and permits
This is where construction requests stall more than anywhere else.
- Plans: architectural and engineering plans for what you're building. Stock plans are fine if they fit the lot.
- Permits: where they stand. "Approved and ready to pull" is a lot stronger than "we'll submit next month."
- Zoning and utilities: confirmation that the lot is zoned for what you're building, and that water, sewer (or septic), and power are available.
A lender can't value a building that can't be permitted, so the closer you are to shovel-ready, the faster the answer.
4. A detailed budget
A construction budget is the heart of the request. "$300K to build" isn't a budget. A lender wants line items:
| Category | Examples |
|---|---|
| Hard costs | Site work, foundation, framing, roofing, windows, mechanical, electrical, plumbing, insulation, drywall, finishes, landscaping |
| Soft costs | Plans, engineering, permits, fees, insurance, builder's risk, utility hookups |
| Contingency | A cushion for overruns and surprises |
Why the detail matters: construction loans fund in draws. As each stage of work is completed and inspected, money is released for it. A detailed budget is what those draws are measured against. It also tells the lender you know what the project actually costs.
Contingency isn't padding. Materials prices move, inspectors ask for changes, and subs don't always show up. A budget without contingency is a budget that's going to be wrong.
5. A realistic schedule
How long from groundbreaking to certificate of occupancy? Our construction terms run 12–24 mo. Your schedule needs to fit inside that with room to spare.
Build in time for:
- permit and inspection waits,
- weather (ask any Minnesota builder about winter),
- material lead times,
- the sale or the lease-up after completion.
A loan that matures before the building sells or refinances is a problem nobody wants.
6. Your cash: equity and reserves
Lenders won't fund 100% of a project. With a loan-to-cost limit of 85% of project, you're covering the rest — in cash or land equity — plus closing costs and points.
Then there are reserves. Construction projects carry interest, insurance, and taxes every month, and they run long more often than they run short. Reserves are what let you finish when month twelve becomes month sixteen. A lender who sees thin reserves on a construction loan sees a project that might stall half-built — the worst outcome for everyone.
7. An exit backed by evidence
How does the loan get paid off when the building is done?
- Sell it (spec build): comparable sales of new or similar construction nearby, a realistic list price, and time to sell.
- Keep it (build-to-rent): comparable rents, and a long-term loan the finished property will qualify for. For a 1–4 unit rental, that's typically a DSCR loan — check that the rent will cover the payment before you break ground.
The completed-value cap matters here. If the comps don't support the value you're building to, the loan shrinks and you bring more cash. Our guide on LTC vs. LTV vs. ARV shows how the cost test and the value test interact.
Who's building it?
If you're the general contractor, the lender is underwriting you as both borrower and builder. If you're hiring a GC, the lender will want to know about them too:
- their license and insurance,
- their track record on similar projects,
- the contract between you, and
- how they'll be paid out of draws.
A construction loan checklist
Before you request terms:
- Track record: past builds with costs, timelines, and outcomes
- Land: contract or deed, and any existing liens
- Plans, permits, zoning, and utilities status
- Line-item budget: hard costs, soft costs, contingency
- Schedule with room for weather, inspections, and the exit
- Builder information, if it isn't you
- Cash for your share, closing costs, and reserves
- Exit: sales comps or rental comps, plus the refinance plan if you're holding
- An LLC or corporation to borrow (why)
What happens next
If the project fits our lending box, we move it toward terms. If it's bigger, more complex, or outside 1–4 units, we'll put it in front of network lenders who do exactly that kind of build — see small multifamily & 5+ unit loans. Either way, you'll get a straight answer about what it would take.
Ready? Send us the project, or read more about our ground-up construction loans.
Business-purpose, non-owner-occupied only; entity borrowers (LLC or corporation) required; full recourse. Rates shown are the lowest offered and depend on borrower FICO, experience, and the deal. Points and fees vary. *Stabilized Bridge offers a no-DSCR option for properties listed for sale and a 1.10x exit-DSCR option for rent-ready properties. Not available in every state. Nothing here is a commitment to lend or an offer of specific terms; all loans subject to underwriting and approval.