We have some great products for Southern California hard money construction loans rolling out. We've found an influx of clients contacting us for hard money construction lending lately. While the real estate market is strong right now, institutional construction lending seems to be tightening up with increased cash requirements and delays.
Our construction and construction completion loans typically look at the as complete value rather than a cost to build ratio. While on ground up construction projects we would prefer to see 30% of cost in, we do have options that can reduce that number - sometimes to as low as 15% of cost required.
This is especially true on a construction completion project, or a ground up construction project where plans and permits are in hand and the client is ready to break ground.
Typically speaking our construction based loans are structured to have both a fund control account and an interest reserve set up. On a ground up construction the fund control typically will run through a third party that will take care of inspections and approvals on the release of funds. For rehab and construction completion projects, the structure of the fund control can have more flexibility.
The interest reserve is typically set up to carry the loan through the anticipated build and sell time. Ideally the property will be completed well before the interest reserve fund is depleted. When the loan is paid off, the unused portion of this interest reserve is applied towards the outstanding principal - so there is no guaranteed interest or prepayment penalty typically speaking.
We can help with many different types Southern California hard money construction loans. From single spec homes to larger development deals. If you are a developer and are having problems obtaining the bank funding needed for your construction project, give us a call and see if we can help - 877 462 3422. You can also visit our hard money construction loans page for more details about our construction programs.