Fast New Construction/Ground-Up Loans
Your business needs are unique. Provident Commercial Capital tailors new construction loans (also known as “ground-up” loans) that provide builders and real estate investors the necessary funding to commence and complete their construction projects. Provident Commercial Capital professionals work with you from the ground up to provide flexible terms, favorable rates, and personalized options so you can access funding to acquire, renovate, and develop real estate. Wherever your business is located in the United States, Provident Commercial Capital provides the perfect loan solution for your ground-up construction project. And since we underwrite low-fee ground-up construction loans in-house, we can close deals fast, usually within 5 to 10 business days from the time our LOI is executed.
If you need capital to develop properties to sell or rent, Provident Commercial Capital ground-up construction loans carry your projects through from beginning to end.
Ground Up Construction Loans
- Property Types:Single-family, condos, townhomes, multifamily properties
- Loan Amount:$250k - $25M
- Base Rate:7.99%
- Max LTC:90%
- Max Loan to ARV:75%
- Term Lengths:Up to 18 Months, extensions available
- Minimum FICO:680
Why Provident Commercial Capital
Our ground-up construction loans provide builders with common-sense lending programs that make accessing capital for developing new homes to sell or rent out easy.
Competitive Rates & Terms
Customized ground-up loan solutions at the forefront of the market with compelling rates and terms.
Quick and Reliable
Real estate deals are complex and can move slowly, but our new construction experts allows us to move projects fast, efficiently, and with certainty.
Receive personalized service that will help you every step of the way, offering an efficient and diligent process from beginning to end.
Loan Products for Every Strategy
With a variety of loan options for building to sell or rent, our team will help maximize your ROI and create a simplified experience for every investment strategy.
Frequently Asked Questions
A new construction or ground-up loan is a short-term, high-interest product that provides funding for real estate investors to build a residential property, such as single- and multi-family homes, condominiums, and townhouses, to sell or rent. The new construction loan helps cover the costs of acquiring the land, building permits, building materials, and contracted labor.
A new construction loan is a short-term loan for real estate investors and builders, unlike a 30-year mortgage for homeowners such as FHA (Federal housing Administration) loans. With a conventional mortgage, you start paying back principal and interest right away. With construction loans, you typically make only interest payments during the construction stage and are only obligated to repay interest on those funds drawn to date until construction is completed.The loan covers the costs of construction only, or sometimes also for the purchase of the land. Once the property is built and a certificate of occupancy issued, the new construction loan can be refinanced as a permanent mortgage.
Depending on the project, ground-up construction loans are usually issued for the time in which building construction is expected for completion and a certificate of occupancy issued. If a project is delayed and lasts longer than anticipated, there may be penalties built into the loan for delays.
Depends on the loan, but there is generally no prepayment penalty for paying off the loan early. Always read the fine print about loan extensions and prepayment options.
While different lenders have different requirements, generally speaking, however, applications with a detailed project plan have a higher chance of approval. The more a lender knows about a project, the more confidence a lender has to originate a new construction loan.
It varies, depending on the lender. In most cases, you draw funds as each phase of the project is completed, typically only repaying interest. Throughout construction, an appraiser or inspector assesses the build at key intervals, for example completed framing, to authorize issuance of additional funds. On average, a new construction loan requires anywhere from four to six inspections to evaluate progress and authorize draws. Make sure you understand exactly what the lender requires to approve each draw and what fees you pay for each draw so you have sufficient funds to cover a specific phase of new construction.
Rates are variable, fluctuating depending on the prime rate. Expect a ground up construction loan rate to be about one to four percent higher than whatever the federal prime rate is, depending on leverage request and other loan qualifications. The reason rates are higher is because new construction loans are considered riskier for the lender; unlike a home mortgage loan there is no collateral—i.e., the home— to seize in the event of default. Keep in mind that you are only paying interest on the money that you draw, not the entire loan amount.
Secure your commercial real estate loan today!