The borrower must usually contribute 20% of the total project cost.

The borrower must usually contribute 20% of the total project cost.  In other words, value-added lenders will only lend up to 80% of cost.  In many cases the borrower will already own the land or the building, and he may have this much equity in the property or in prepaid costs, such as architectural fees and engineering fees.   If the borrower was successful in re-zoning the property, he may have this equity in the increased value of the land.  If not, the borrower must bring the shortfall to the closing table in cash.