Development & Construction Mortgage Financing

Draws are released as project milestones are met (e.g., foundation, framing, lock-up). An inspector typically visits the site to verify progress before funds are released.

LTC (Loan-to-Cost) is the percentage of the project's total cost the lender will fund. LTV (Loan-to-Value) is based on the appraised future value (ARV) of the completed project.

A draw schedule is a plan for how funds are released as the project progresses. Lenders typically release money upon completion of specific milestones (foundation, framing, etc.), verified by a third-party quantity surveyor or inspector.

Most development lenders require 20% to 35% equity. This can be in the form of cash or "land equity"—the value of the land if you already own it and have added value through zoning or permits.

Yes, we arrange land acquisition loans. Lenders typically provide 50% to 65% LTV on the land value, depending on the zoning status and how close you are to breaking ground.

A take-out mortgage is the long-term permanent financing that "takes out" (pays off) the construction loan once the building is completed and stabilized (leased up). We usually arrange the take-out commitment alongside the construction loan.

It depends on the lender and project size. Some banks require pre-sales for large multi-family, while private and bridge lenders often fund 'spec' projects without pre-sales.

Lenders look for a track record of successful projects. If you are a first-time developer, having an experienced general contractor or partner can help secure financing.

Mezzanine is a layer of "gap" financing that sits between the senior debt and your own equity. It allows developers to maximize leverage and reduce their own cash outlay, though it comes at a higher interest rate.

Yes. We work with specialized lenders who understand the unique operating dynamics and demand drivers for seniors housing, self-storage, student housing, and data centers.

Development financing is complex. Expect 60 to 90 days to secure a firm commitment, as lenders need to perform extensive reviews of your pro forma, budget, permits, and development team.

A QS is a professional who monitors construction progress and budgets. Lenders use QS reports to verify that the project is on track before releasing each draw of funds. This protects both the lender and the developer.