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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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8 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 2 weeks, 4 days 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 weeks, 6 days ago by Marcos.
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This reply was modified 2 weeks, 6 days ago by
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In April, Redfin and TheStreet reported that sellers outnumbered buyers by 46.5%, providing buyers with a rare advantage. However, Redfin indicates that this advantage is diminishing. Rising mortgage rates are exerting a significant influence on the market. Last month, Freddie Mac reported that the 30-year fixed mortgage rate reached 6.53%, the highest level in nine months. MarketWatch also observed that the 10-year Treasury yield rose above 4.50% as oil prices increased.
Impact of Rising Mortgage Rates and 10-Year Treasury Yields on Homebuyers
Elevated 10-year Treasury yields and mortgage rates have increased the difficulty of purchasing a home. Increases in U.S. government bond yields typically lead to higher mortgage rates. Currently, 30-year fixed mortgage rates are nearing the upper 6% range.
TheStreet reports that in April, sellers outnumbered buyers by 46.5%, giving buyers greater negotiating power. However, Redfin cautions that this window is narrowing and market momentum is decelerating.
Timing remains critical for prospective buyers and investors seeking mortgages. Failure to secure a rate lock may result in higher monthly payments as rates fluctuate. Even minor increases can reduce affordability and impact loan approval based on income and debt levels.
Geopolitical Tensions, Oil Prices, and Inflation Poised to Disrupt Financial Markets
Tensions between Iran and the United States are contributing to economic uncertainty. Elevated oil prices are increasing transportation, energy, and food costs, thereby placing additional pressure on consumers and businesses. Inflation and oil prices often rise concurrently.
Buyers may identify favorable opportunities in markets where housing supply is increasing and prices are declining. However, rising interest rates could rapidly diminish these potential savings.
High oil prices complicate the Federal Reserve’s efforts to reduce interest rates and may destabilize mortgage markets. Rising yields, oil prices, inflation, and political instability collectively increase the cost of living and conducting business. These factors impact homebuyers by increasing costs at fuel stations and grocery stores. Redfin currently characterizes the market as favorable to buyers, though this opportunity may be temporary. According to Redfin’s housing tracker, purchasing a home has become more accessible.
Recommended Actions for Homebuyers Prior to Interest Rate Changes
Homebuyers who have already entered into a contract should promptly consult with their loan officer to discuss rate locks, flexible options, and payment plans. Prospective buyers are advised to obtain full approval, review payment options, and minimize borrowing where possible.
Interest Rate Forecast
Rising interest rates reduce cash flow, limit the ability to service debt, and exert downward pressure on resale prices, profits, and renovation costs. In the current volatile market, transactions should be priced according to prevailing rates rather than historical ones.
GCA Forums will continue to monitor developments in housing and mortgage markets. The platform will track national changes affecting mortgage rates, housing affordability, inflation, oil prices,
Treasury yields, and real estate markets. Homebuyers, homeowners, mortgage professionals, and real estate investors are expected to be most affected by volatility and pricing risks resulting from inflation, bond yields, and global events.
Redfin forecasts a significant shift in the housing market for homebuyers.
The average long-term mortgage rate in the United States has reached 6.53%, the highest level in the past nine months.
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