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Construction Loans
Finance ground-up construction or major renovation projects
Commercial construction loans fund new development or major rehabilitation projects. Funds are disbursed in stages as construction progresses. Most are short-term (12-36 months) and convert to permanent financing upon completion.
Find Construction Lenders →Loan Range
$500K – $100M
Typical Rate
7% - 10%
Down Payment
20-35%
Term
12-36 months (construction period)
Closing Time
30-60 days
🎯 Best For
- • Ground-up development
- • Major renovations
- • Land + construction
- • Build-to-suit projects
✅ Advantages
- ✓ Interest only on drawn funds
- ✓ Funds disbursed as needed
- ✓ Can include land acquisition
- ✓ Construction-to-permanent options available
⚠️ Considerations
- • Requires detailed plans and budgets
- • Draw schedule inspections
- • Higher rates during construction
- • Completion risk on borrower
Construction Loan Requirements
- ✓ Detailed construction plans and budget
- ✓ Licensed general contractor
- ✓ Building permits
- ✓ Development experience (strongly preferred)
- ✓ 20-35% equity
Construction Loans FAQ
How do construction loan draws work? ▼
Funds are released in stages as construction milestones are completed. An inspector verifies work before each draw. You only pay interest on the amount drawn.
What is a construction-to-permanent loan? ▼
A single loan that automatically converts from a construction loan to a permanent mortgage once building is complete. Saves closing costs vs. two separate loans.
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