Plan the construction loan and the repayment together
A project may need financing for land, construction and lease-up before it qualifies for a permanent loan. We assess those stages together so the initial loan does not depend on a refinance the finished property is unlikely to support.
Compile the project materials
Start with the site, plans, entitlement status, development budget, schedule and projected operating income. Include the sponsor’s relevant projects, proposed equity contribution and any existing loan terms.
Compare funding structures
We evaluate the loan amount, equity requirement, draw conditions, guarantees, reserves and repayment plan. A construction-to-permanent loan and a separate construction loan with a later refinance create different costs and risks.
Understand the conditions before you commit
Lenders may require permits, a construction contract, contractor review, third-party reports and sponsor equity before funding. Ask what is required at closing, what applies to later draws and how delays or budget changes are handled.
Test the completed project
We model the permanent financing or sale under different income, cost and timing assumptions. Slower leasing, a lower valuation or higher debt service can change the amount available to repay the construction loan.
Construction loan considerations · Documents to compile · Our financing process