Ground-Up Commercial Construction Financing
Commercial construction loans for ground-up and major renovation projects. Draw-based funding, interest-only during construction, with a clear path to permanent takeout.
$1M–$20M
Loan range
Ground-Up
Project type
Draw Based
Funding
Perm Takeout
Exit strategy
Overview
Commercial Construction Loan Financing
A commercial construction loan provides the capital needed to build a new commercial property from the ground up or execute a major renovation that substantially changes the building's use or value. Unlike traditional commercial mortgages, construction loans are disbursed in draws as work is completed.
During the construction period, payments are typically interest-only on the amount drawn — keeping costs manageable while the building is under construction. Once construction is complete and the property is stabilized, you refinance into a permanent commercial mortgage.
Lumen Mortgage structures commercial construction loans with clear draw schedules, construction management oversight, and a defined path to permanent financing. We finance office, retail, industrial, mixed-use, and other commercial construction projects across 40 states.
Who This Is For
Key Features
What Makes This Program Work
Ground-Up & Major Rehab
Financing for new commercial construction and major renovations that substantially alter the property's use, layout, or value.
Draw-Based Funding
Funds are disbursed in draws as construction milestones are completed, verified by inspection. You only pay interest on amounts drawn.
Interest-Only During Construction
No principal payments during the construction period — maximize cash flow while the building is being built.
Permanent Takeout Path
We structure construction loans with a clear exit to permanent commercial financing once the project is complete and stabilized.
Up to 75% LTC
Loan-to-cost ratios up to 75% for well-structured projects with experienced sponsors and strong market fundamentals.
Construction Management
Our team monitors construction progress, approves draw requests, and ensures the project stays on track and within budget.
Underwriting Tool
Commercial Loan Calculator
Model debt service, DSCR, cap rate, and debt yield on any commercial deal instantly.
Commercial Loan Calculator
CRE Debt Service & NOI Analyzer
Loan Details
Loan-to-Value
57.1%
Equity
$1,500,000
Interest-Only
This property's NOI provides strong debt service coverage. Expect favorable pricing, terms, and LTV flexibility.
Cap Rate
7.25%
Debt Yield
12.70%
Monthly Cash Flow
+$8,517
Annual
+$102,204
| Year | Principal | Interest | Balance |
|---|---|---|---|
| 1 | $22,355 | $129,342 | $1,977,645 |
| 2 | $23,852 | $127,845 | $1,953,794 |
| 3 | $25,449 | $126,247 | $1,928,345 |
| 4 | $27,153 | $124,543 | $1,901,191 |
| 5 | $28,972 | $122,724 | $1,872,220 |
| 6 | $30,912 | $120,784 | $1,841,307 |
| 7 | $32,982 | $118,714 | $1,808,325 |
| 8 | $35,191 | $116,505 | $1,773,134 |
| 9 | $37,548 | $114,148 | $1,735,585 |
| 10 | $40,063 | $111,633 | $1,695,523 |
| 11 | $42,746 | $108,950 | $1,652,777 |
| 12 | $45,609 | $106,088 | $1,607,168 |
| 13 | $48,663 | $103,033 | $1,558,505 |
| 14 | $51,922 | $99,774 | $1,506,582 |
| 15 | $55,400 | $96,297 | $1,451,183 |
| 16 | $59,110 | $92,587 | $1,392,073 |
| 17 | $63,069 | $88,628 | $1,329,005 |
| 18 | $67,292 | $84,404 | $1,261,712 |
| 19 | $71,799 | $79,897 | $1,189,913 |
| 20 | $76,608 | $75,089 | $1,113,306 |
| 21 | $81,738 | $69,958 | $1,031,568 |
| 22 | $87,212 | $64,484 | $944,355 |
| 23 | $93,053 | $58,643 | $851,302 |
| 24 | $99,285 | $52,411 | $752,017 |
| 25 | $105,934 | $45,762 | $646,083 |
| 26 | $113,029 | $38,668 | $533,054 |
| 27 | $120,599 | $31,098 | $412,456 |
| 28 | $128,675 | $23,021 | $283,781 |
| 29 | $137,293 | $14,403 | $146,488 |
| 30 | $146,488 | $5,209 | Paid off |
| Total | $2,000,000 | $2,550,890 | paid off |
For illustrative purposes only — not a loan commitment or term sheet. Commercial underwriting varies by property type, market, and borrower profile. Contact a Lumen Mortgage commercial specialist for a formal analysis. NMLS #1498678.
Requirements
Commercial Construction Qualification Guidelines
Note: Guidelines vary by property type, market, and deal structure. Contact our commercial team to discuss your specific deal — we issue preliminary term sheets within 24–48 hours at no cost.
Ready to Move Forward?
Term sheets within 24–48 hours
Our commercial mortgage specialists will review your deal and issue a preliminary term sheet outlining rate, LTV, term, amortization, and key conditions — at no cost and no obligation.
Call 503-966-9255NMLS #1498678 · No cost, no obligation
From the Blog
Further Reading
InvestmentSpec Construction Loans in Oregon & California: Strategy, Qualification, and the Profit Calculus in 2026
Building on speculation is one of the highest-leverage plays in residential real estate — and one of the most misunderstood. Here is a ground-level look at how spec construction loans work, what lenders actually underwrite, and why the Oregon and California markets still reward disciplined builders.
Bridge LoansBridge Loans: Buy Your Next Home Before Selling Your Current One
In a competitive market, waiting to sell before you buy can cost you the home you want. A bridge loan lets you make a non-contingent offer using your existing equity — here's how it works.
CommercialCommercial Cash-Out Refinance: How Savvy Investors Tap Equity to Renovate, Rehab, and Expand Their Portfolios
Your commercial property has probably appreciated more than you think — and a cash-out refinance lets you put that equity to work without selling the asset. Here's how smart investors use low-cost, already-owned equity to fund renovations, rehab value-add properties, and grow their CRE portfolios in 2026.
Common Questions
Commercial Construction FAQs
Answers to common questions about commercial construction financing.
What Our Clients Say
Five-Star Reviews from Real Borrowers
All reviews verified on Google
Ready to Finance Your Commercial Construction Deal?
Our commercial mortgage specialists respond within 1 business day with a preliminary term sheet tailored to your property type, deal structure, and investment goals.
NMLS #1498678 · Nationwide Commercial Lending · No cost, no obligation