Construction Loan
Up to 100% Financing
For residential builders
Interest Rate
10 - 13.25%
Origination fee
from 1.875%
Loan To Cost (LTC)
up to 90%
Construction Financing
up to 100%
Loan To ARV
up to 75%
Term
up to 24 months
Minimum Loan Amount
$100,000
Maximum Loan Amount
$5,000,000
Minimum FICO
650
Type of Property
Residential 1-4 units, condos, townhomes
How To Get A Construction Loan
Applying for a construction loan differs from a traditional mortgage. Here’s a step-by-step guide:
- Project Preparation: Define your construction project, assess your financial situation, and determine the loan size needed.
- Choose a Lender: Compare rates and terms, in order to choose an experienced construction lender.
- Gather Documents: Collect the required documents, including project plans, financial proof, credit report, and down payment estimate. Complete the loan application.
- Loan Terms: After reviewing your application, the lender provides loan terms, including rates, repayment period, loan amount, and fees. Review and understand these terms.
- Loan Closing: Sign the loan agreement, pay closing costs (e.g., origination fees, appraisal fees), provide the down payment, and receive the funds.
Choosing The Right Construction Loan Lender
Top 3 Construction Loan Lenders
1. New Silver Lending: New Silver offers fast approval and funding, interest-only payments during construction, and up to 100% financing. They prioritize a data-driven approach to lending, making the process smoother and more efficient.
2. Nationwide Home Loans Group: This lender offers one-time and two-time close construction loans, with up to 100% financing. They fund primary residences, second homes, ADUs, and 1-4 unit multi-family properties, making them versatile in terms of the properties they cover.
3. ABL1 (Asset Based Lending) is one of the prominent construction loan lenders focused on helping small business owners, real estate investors, and commercial contractors finance their business activities. These loans are tailored to each person’s needs and ABL provides hard money construction loans in over 29 states across the US.
You can also find a full list of Construction Loan Lenders here.
Construction Loan Rates
Construction loan rates generally range between 8% and 14%, depending on the lender. These interest rates are based on market conditions, the borrower’s financial position, location, lender terms and the Loan-To-Value (LTV) ratio.
Origination fees on construction loans range between 1% and 3% of the loan amount. These fees are charged by the lender to facilitate and process the loan.
Additional closing costs associated with construction loans are appraisal fees, title insurance, legal and escrow fees, credit report fees and insurance costs.
Construction Loan Requirements
There are a number of Construction Loan Requirements.
Interest Rates and Fees: These loans often have higher interest rates and fees due to the increased risk. New Silver’s rates typically range between 10 and 13.25%.
Origination Fee: There’s an upfront fee, starting at 1.875%, to cover processing and underwriting costs. It’s paid at loan closing.
Minimum Down Payment: Lenders require a down payment, usually 10-20% for New Silver, demonstrating commitment to the project.
Minimum FICO Score: While real estate deal quality matters most, a minimum FICO score of 650 is required.
Loan To Cost (LTC): New Silver offers an LTC of up to 90%, covering that percentage of the total project cost.
Loan To ARV: New Silver provides a Loan To ARV ratio of up to 75%, covering a percentage of the property’s after-repair value.
Construction Financing: New Silver covers up to 100% of construction financing. A detailed plan and contractor information may be necessary.
Loan Term: New Silver offers loan terms of up to 24 on construction loans, outlining interest rate, duration, fees, and more.
Minimum and Maximum Loan Amounts: New Silver’s minimum loan amount is $100,000, and the maximum is $5,000,000.
Property Type: New Silver’s construction loans cover various property types, including Residential 1-4 units, condos, townhomes.
Property Appraisal: A professional appraisal is required to assess the property’s current and expected value after renovations.
These requirements guide borrowers through the process of securing a construction loan from New Silver.
Construction Loans Near You
New Silver Offers Construction Loans Across The US
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- Washington DC
- West Virginia
- Wisconsin
- Wyoming
Construction Loan Resources
This Construction Loan Calculator quickly works out the maximum loan amount that you can qualify for when applying for a Construction Loan.
Find out the latest Construction Loan Rates here. This guide explores what rate you are likely to qualify for.
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