Construction Loans Delaware

What You Need To Know About Building In Delaware

There are plenty of reputable construction loan lenders in Delaware, but for your application to get approved, you need to have building plans.

• Most Construction Loans in Delaware offer interest only payments.
• Importantly, you are required to pay back 100% of the loan amount, when the loan terms end.

To pay back the loan in full, you need to have a clearly defined exit strategy. Either you need to sell the development for a healthy profit, or you need to refinance the property based on the revised value of the building once it is completed.

In addition, there other important factors that a lender will consider when assessing a loan application, including:

FICO Score: Typically, there will be a minimum FICO score that the borrower needs to meet in order for the loan to be granted. At the current moment in time, the minimum FICO is 650.

Cost of Project: A reputable lender should be willing to cover a substantial portion of the project cost. This ratio is called Loan To Cost, and it is a quick way to assess how much capital you can access to complete the building project. At this moment in time, New Silver offers up to 90% Loan To Cost (LTC).

Best Construction Loan Lenders In Delaware

1. New Silver

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• Interest rates 10 – 12.75%
• Instant proof of funds letter
• Credit score 650+
• Interest only payments

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2. Lima One

Lima One Capital is a private lender offering investment property loans for various investing strategies. Borrowers can work together on their deals with the in-house team of experts at Lima One, which speeds up the hard money lending process and cuts out any middlemen.

Lima One offers new construction loans for builders who are ready to begin a ground-up project, or a tear-down. Up to 85% LTC is offered, along with 70% LTV. Loans begin at $100,000 and the maximum amount that can be borrowed is $3 million. Lima One also has a Build to Rent loan product which offers longer loan terms.

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3. Asset Based Lending

ABL (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.

ABL’s new construction loans are used for land acquisition and construction or rebuilding of existing property. Previous experience is an essential element when applying for these loans. New construction loans can be used for single family, multi-family, and mixed-use properties.

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4. Nationwide Home Loans Group

Nationwide home loans group, another top contender in the list of best construction loan lenders, offers both one-time and two-time close construction loans. The lender has made it to the top of the list based on their loan offerings and they offer up to 100% financing of the construction. Nationwide Home Loans Group provides funding for primary residences, second homes, ADUs and 1-4 unit multi-family properties.

The lender facilitates all parts of the process, from searching for a property to communicating with builders. Nationwide Home Loans Group provide fixed-rate and interest-only terms on their construction loans. The one-time close construction loan requires only one appraisal and no-requalification once the construction is complete.

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5. Lending One

LendingOne is a direct lender for real estate investors, with loans that are tailored to each investor’s strategy and is one of the top ranked Construction Loan Lenders in 2023. Lending One offers ground up construction loans which are between 12 and 24 months.

These require interest-only payments for a period of time and are applicable for single-family detached properties, condos, town homes, multi-family properties

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DE Real Estate Market Analysis

Over the last 12 months, home prices in Delaware have increased by 3.4%, with an average home value of $375,918. This is $26,000 more than the average home value in the US, which is currently $349,770.

The Median sale to list ratio is 1.00. This suggests that the Delaware real estate market is relatively neutral right now.

• The percent of sales over list price is 33.6%.
• The percent of sales under list price is 46.7%

The real estate market in Delaware has been on a steady incline for the past few years, with median home prices increasing and more buyers entering the market. With its diverse economic landscape, proximity to major cities, and numerous coastal towns, Delaware has become an attractive option for both real estate investors and homeowners.

The Delaware housing market is being influenced by a number of factors, including increasing wages, low mortgage rates, and an influx of new residents to the state. Wage growth in Delaware has been on the rise for several years, with median household income rising steadily since 2011. This is encouraging more people to become homeowners as they have more money to spend on one of life’s biggest investments. Low mortgage rates are also helping fuel the market, as they make it easier for buyers to get into homes that they may not otherwise be able to afford.

Data Sourced From – Zillow.com