Construction financing or construction loans are short term loans that are meant for constructing a house/housing development or a large scale project. In this loan, a real estate business or a home owner applies for construction financing to manage the costs incurred before a bigger loan is sanctioned.
Requirements of Construction Financing
Since construction financing is a higher-risk category, lenders who offer construction financing typically ask for a minimum of 20% to 25% down payment on the loan. This is largely because the property for which the loan is being paid is yet to be constructed, therefore the only collateral is piece of land as security for the lender. To offset this risk, lenders require that loan applicants provide a “Blue Book.” This document has a list of construction details and it has to be accompanied by a proof that the borrower is himself/herself a qualified builder or has one on board for their project.
Why Priority Lending
Priority Lending has the right experience and set of lenders to help business owners secure capital they need to fund their construction projects. You can expect a knowledgeable staff and an efficient process.