SPEC Construction Loans for Builders & Investors

Additional Resources

• Land

  Construction Loan	We will finance up to 75% of land costs (plus up to 100% of vertical costs ) for qualified builders.
  Subordination / Seller Financing	This is a way to get more financing ! The land seller is essentially providing seller-financing on ALL the land while Builder Finance may provide nearly ALL the funds for vertical construction. We can work with a land seller to help make this happen by providing necessary paperwork.
  Land Loan	Loans available for Acquisition & Development or Land Inventory. Contact us for more details.

• Draw Process

  Equity First	After a loan is approved, the loan amount is set. Total costs minus the loan amount is what we call the “equity”. The borrower fulfills this equity need first. Then we fund 100% of the remaining costs according to an approved budget. The land can cover the equity requirement.
  Draws	Submit a draw request. We fund it then we inspect to confirm completion. See Draws for notes and exceptions. Draws requiring an inspection cost $150 each.
  Interest & Fees	During the initial term and first extension, all interest and loan fees may accrue to the balance of the loan and be paid off at maturity.
  General Contractor	With each draw request the GC and/or the borrower will provide a General Contractor Consent and Acknowledgment. See Draws for how GC fees may be paid by us.

• GC's

  We like to work with qualified General Contractors.

  We like to work with qualified General Contractors.

  We can help you win Fee Business. Team up with an investor – domestic or foreign – and we can be your lender.

  We can help you with your own Spec Projects. If you know how to build and what to build, we would like to be your lender.

  Start building a relationship with Builder Finance Inc. Let’s work together on fee business and your spec projects.

• FAQ

  WHO can borrow?	Borrowers are strictly organized as business entities – primarily limited liability companies (LLC’s).
  WHAT are loans for?	We lend for the construction of 1-4 unit, “single-family” homes and 5+ unit multifamily residential structures. Loans for similar but different purposes such as land inventory loans and model homes are available on a case-by-case basis. All lending is strictly for business purposes – borrowers that sell or rent their projects – we DO NOT lend to owner-occupants. Any non-residential portions of a structure such as ground floor retail will be assigned no value for underwriting purposes.
  TIMING?	Our target timing is tied to receipt of the final appraisal: Appraisal +1 business day: contact applicant with loan decision/loan size. Appraisal +2 business days: deliver loan documents. Timing may slip but generally not by more than a day. For us to be this fast, you would need to promptly provide needed items.
  SIZE?	Our minimum loan size is $75,000. Our maximum is increasing, so please speak with a loan representative. Loans are sized first and foremost based upon building experience and repayments to BFI. From there, adjustments are made based upon financials, the market, and a background search. Please refer to our Lending Matrix for specifics. Note that loan size will be constrained to a maximum LTV, the requirement that the borrower have a minimum amount of equity in the project as a percentage of total cost.
  COST?	Loan interest and upfront fee stated on our Terms page are essentially set in stone for everyone; an exception is unlikely but not impossible for a high volume of extraordinarily safe loans. Most other costs are pass-through expenses such as title and recording fees.
  QUALIFICATIONS?	To qualify for a BFI loan without an exception, the following must be true: The members of the borrowing entity and/or their general contractor have the requisite building experience. The population within a 3-mile radius is at least 3,000. The population within a 3-mile radius is expected to be roughly flat or to increase over the next 5 years. There are zero felony convictions for fraud or misrepresentation concerning owners of the borrower. There are zero material misrepresentations in the loan application. A loan may also be declined for reasons determined by BFI, at its sole and absolute discretion, on case-by-case basis. Commonly, such declines are based around our belief that the loan would be problematic: unlikely to payoff within 14 months of closing and/or while outstanding likely to require an extraordinary amount of BFI staff time in “hand-holding” or “process clarifications” with the borrower. Note that available loan proceeds may be adjusted based upon a variety of factors. For example, there is no minimum credit score to qualify, but if the credit score is low it may diminish loan size. Refer to our Lending Matrix for details or use our Loan Estimator .
  EXTEND?	Loan documents provide borrowers with an initial period plus one extension option of 4 months. Any additional extension(s) would be available at the sole and absolute discretion of Builder Finance Inc. and would likely be subject to: ongoing loan performance, a satisfactory re-evaluation of the property, execution and timely delivery of proper extension documentation, and pay-down of all accrued interest. Any such additional extension(s) are subject to an extension fee and an increase in the interest rate.