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HARD MONEY LOANS BUILDERS
If you are a builder of one to four unit homes, we can get you a 25% down payment on the land and up to 100% on the construction costs at competitive rates and fast closing. No credit score required, no maximum debt to income ratio, and no income verification. Please inquire if you are interested in getting new construction financing on spec homes
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7 Replies
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That is great! I know that will help a lot of my builders!
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Absolutely Amanda. This is a great opportunity for builders and buyers
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Who do you target at builders?
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The new construction financing proposition for builders of one—to four-unit homes sounds sweet. It is incredibly useful for builders who wish to have relaxed conditions and speedy access to cash without going through the customary credit and income scrutiny route.
The program seems interesting for builders of one—to four-unit homes. It is a new construction financing offer that is a good choice for builders looking for quick capital and flexible terms without standard income verification and credit checks. The recent offer on construction finance for builders of single-family to four-family units is attractive. It’s nicely suited for construction builders who desire lenient conditions and quick funding without having to meet all the necessary credit and income tests. Do not hesitate to ask if you need assistance advertising this program or want to mention certain aspects. We will be glad to help!
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What are the terms and rates on hard money loans on a new construction build a a single family home
Land and construction. Construction cost tentatively $125,000 and lot is $10,000. Also cost and fees.
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Hard money loans for land and new single-family home construction offer favorable terms, though at a higher cost. The following figures illustrate typical loan parameters:
- Lot: $10,000
- Construction cost: $125,000
- Total project cost: $135,000
Hard money new-construction loans are generally short-term options for investors. Most lenders offer interest rates between 10% and 14%, with 1.5 to 4 points. Rates vary based on experience, credit, property value, location, exit strategy, and loan-to-cost. Some lenders may exceed these ranges depending on risk.
New Construction Hard Money Loan Terms
A Typical Loan Structure Includes:
- Loan term: 6 to 18 months, with 24 months available in some cases
- Interest rate: 10% to 14% interest only
- Points/origination: 2 to 4 points
- Loan-to-cost: 70% to 85% of total project cost
- Loan-to-ARV: typically capped at 60% to 70% of the after-repair value
- Payments: interest only, often on the amount drawn
- Construction funds: released in draws after inspections
- Exit strategy required: sell the home, refinance into a DSCR or rental loan, or refinance into a permanent mortgage
- Some lenders may finance 100% of construction draws but require you to pay for the land, closing costs, interest reserve, or contingency.
- Others may finance both land and construction, depending on the completed property’s value.
At 85% Loan-to-Cost, the Loan Would Equal:
- $135,000 × 85% = $114,750 loan
- The estimated cash required would equal approximately:
- 15% to 25% donw payment: $20,250 to $33,750
- Plus, closing costs, points, title, appraisal, inspection fees, and reserves
Estimated Costs and Fees
For Loan Amounts Between $105,000 and $115,000:
- Points on $110,000 equal $2,200
- 3 points on $110,000 = $3,300
- 4 points on $110,000 = $4,400
Other Fees:
- Appraisal or ARV valuation: $500 to $1,500+
- Draw inspection fees: $100-$250 per draw.
- Title, Escrow, Recording, Closing fees: $1,500 to $4,000+
- Legal fees, document preparation, underwriting, and administration: $500 to $2,500+
- Interest Reserve: generally required
- Builder’s Risk Insurance: required
- Construction Contingency: usually 5% to 10% of the construction budget
For your $125,000 construction budget, a Lender May Request a Contingency of approximately:
- 5% Contingency: $6,250
- 10% Contingency: $12,500
Example of Interest Payment
With a Construction Hard Money Loan of 12% Interest-Only, the Monthly Interest Payment would be based on the Drawn Amount.
If only $50,000 is drawn, then:
- $50,000 × 12% ÷ 12 = $500/month interest payment
If the Full Amount of $110,000 is Drawn, then:
- $110,000 × 12% ÷ 12 = $1,100/month
Most construction hard money lenders charge interest on the amount disbursed, not the full loan amount.
Lenders will evaluate not only your $135,000 build cost but also the property’s value after completion.
Let’s Say the Home Completes and Appraises at $200,000. If the Lender Does a 70% ARV, Then the Loan Value May Be
- $200,000 × 70% = $140,000
- This amount can help cover the $135,000 build cost.
However, if the After-Completed Value is Only $150,000, Then:
- $150,000 × 70% = $105,000
- This may affect the loan regardless of the $135,000 build cost.
Realistic Deal Structure
On This Deal, a Hard Money Offer May Look Like the Following:
- Purchase/land + construction loan: $100,000 to $115,000
- Borrower cash needed: $25,000 to $45,000+
- Rate: 11% to 13.5%
- Points: 2 to 4 points
- Term: 12 months
- Payment: interest-only
- Draws: construction draws after completed work inspections
- Exit: sell, refinance, or convert to a rental loan
Bottom Line
For a $10,000 lot and $125,000 build, hard money lenders will focus on ARV, borrower experience, permits, plans, contractor budget, draw schedule, and exit strategy. Typical rates range from 10% to 14%, plus 2 to 4 points, standard closing costs, and inspection and draw fees.
The final appraisal value of the single-family home is the primary factor for lender approval and confidence in the deal.
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This reply was modified 10 hours, 23 minutes ago by
Sapna Sharma.
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The housing and mortgage markets seem bleak for homebuyers. Mortgage rates started creeping back up daily due to the soaring ten year Treasury yields which is hovering around 4.60%. The skyrocketing 10-year Treasuries on top of the IRAN-US CONFLICT, out of control inflation is pushing mortgage rates just shy of 7.0%. Real estate investors and homebuyers in the mortgage process that did not lock their rates can expect a very volatile swing in mortgage rates. The Iran-U.S. Conflict is still affecting huge oil price increasing which in turn skyrocketing inflation and creating affordability issues in all sectors from groceries to mortgage loans. GCA FORUMS NEWS will keep our viewers updated on any national breaking news.
Redfin predicts major housing market shift for homebuyers – TheStreet https://share.google/lKixyoUl9OGBRkjYn
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This reply was modified 2 days, 12 hours ago by Marcos.
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This reply was modified 2 days, 12 hours ago by
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