Construction

Financing

Construction financing provides short-term capital used to fund the development, renovation, or expansion of residential, commercial, and multifamily real estate projects. These financing structures are designed to help builders, developers, investors, and contractors secure the necessary capital needed throughout each phase of construction.

Unlike traditional long-term mortgages, construction loans are typically disbursed in stages, often referred to as “draws,” as the project progresses. Funds may be used for land acquisition, site preparation, labor, materials, permits, architectural costs, and construction expenses.

Types of Construction Financing

Ground-Up Construction Loans

Financing used for new developments built from the ground up, including residential subdivisions, custom homes, apartment communities, office buildings, and mixed-use projects.

Bridge Financing

Short-term funding used to acquire or stabilize a property prior to permanent financing or project completion.

Multifamily Construction Financing

Designed for apartment complexes, workforce housing, student housing, and build-to-rent communities.

Commercial Construction Loans

Funding solutions for retail centers, hotels, industrial facilities, warehouses, medical offices, and commercial developments.

Common Loan Features

  • Loan sizes ranging from small projects to institutional-scale developments
  • Interest-only payments during construction
  • Flexible draw schedules based on construction milestones
  • Loan terms typically between 6–36 months
  • Options for refinance into permanent financing upon completion

Key Underwriting Considerations

Lenders commonly review the following items when evaluating a construction financing request:

  • Project budget and construction costs
  • Experience of the developer or contractor
  • Plans, permits, and timelines
  • Property location and market demand
  • Estimated completed property value
  • Equity contribution from borrower
  • Exit strategy or stabilization plan

Benefits of Construction Financing

Construction financing allows developers and property owners to:

  • Preserve working capital
  • Accelerate project timelines
  • Increase property value through development
  • Access flexible capital structures
  • Fund acquisition and construction simultaneously

Who Uses Construction Financing?

  • Real estate developers
  • Builders and contractors
  • Commercial property owners
  • Real estate investors
  • Multifamily operators
  • Land developers

Construction financing plays a critical role in supporting residential growth, commercial expansion, infrastructure development, and investment opportunities across real estate markets nationwide.