Residential Construction Loans
Residential (1-4 family) construction loans can be made to experienced local builders who have a successful track record or to credit worthy owners who use reputable builders. Typically, a limited on the number of homes (speculative, sold, and resident owner build) under construction will be set for each builder, based on the builder’s financial strength and credit worthiness.
Residential construction loans are generally secured by the property being purchased and developed. Established builders with superior credit ratings may be able to qualify for larger loan amounts, allowing them to build a number of houses, duplexes or multi-family housing units at once. This added level of flexibility can provide significant advantages when purchasing materials and planning construction schedules. Residential construction loan rates can vary considerably depending upon the business's credit history, so it is essential for construction firms to manage their credit obligations properly in order to ensure maximum profitability from their ongoing projects. A typical residential construction loan checklist will include the following documentation:
- The proposed construction budget
- An executive summary describing the entire project
- Personal information for partners, builders, architects and construction supervisors
- Credit report release authorizations for all major parties to the construction project
- Personal and corporate financial and tax statements for the last two years
- Proposed selling prices and comparable selling prices for the area of the development
- A general timeline for project milestones and completion
- Zoning information and necessary permits
- Blueprints or descriptions of the exact building specifications and plans
- Copies of all relevant contracts, deeds or sales agreements
This information will be used to evaluate the application and determine the appropriate residential construction loan rates for the particular project.
CNF Exchange provides a convenient venue to allow construction companies to find the necessary financing for their projects. By making contact with lenders directly through CNF Exchange, these companies can enjoy the most advantageous rates and terms available for their financial needs.