Build It. Sell It. Finance the Whole Strategy.

A construction-to-permanent (CTP) loan is designed for someone building their own home to live in — it converts to a 30-year mortgage when construction finishes. A spec loan is a short-term facility designed for a builder or investor who plans to sell the completed home. There is no permanent conversion; the spec loan is repaid at sale. Underwriting focuses on project feasibility and builder experience rather than the borrower's long-term income.

No — that's the defining feature of a spec loan. You don't need a pre-sold buyer. The loan is approved based on the project's projected after-completion value (ARV), the strength of the local market, and your builder's track record. You begin construction on speculation that the completed home will sell at or above the appraised ARV.

LTC is the percentage of your total project cost (land + construction hard costs + soft costs) that the lender will finance. At 80% LTC, a $1,000,000 total project cost yields an $800,000 loan — you contribute the remaining $200,000. We also look at loan-to-ARV (typically capped at 65–70%) as an additional guardrail to ensure the project makes sense relative to its end value.

Spec loans typically include extension provisions — usually 3- to 6-month increments at a fee — if the home hasn't sold within the initial term. We also evaluate market absorption rates during underwriting to ensure the term is realistic for your submarket.

Yes. Spec construction loans are commonly structured in the name of an LLC, partnership, or other legal entity. A personal guarantee from the principal(s) is typically required regardless of the vesting entity. We'll confirm documentation requirements — operating agreement, good standing certificate, and authorized signatory — during the application process.

That depends on your liquidity, builder capacity, and overall debt exposure. Experienced builders with strong track records and adequate reserves can often support multiple simultaneous projects — we'll review your full picture and structure each project to maximize your financing capacity without over-leveraging.

Up to 85% of total project cost or 75% of the completed appraised value, whichever produces the smaller loan. Total project cost means the land plus your full construction budget including the required contingency line.

No, but it sets your leverage. Three or more completed ground-up projects in the last three years qualifies you for up to 85% of cost. A first ground-up build sizes closer to 65%, which means substantially more cash in the deal. Adding a co-guarantor with a documented recent track record is the most effective way to improve terms.

Beyond your equity, plan for points and third-party costs, a six-month interest reserve, liquidity equal to 10% of the construction budget that you hold rather than spend, and working capital to float draws between reimbursements. Draws fund in arrears against inspected work, so you or your contractor carry 30 to 45 days of costs before each reimbursement arrives. In practice the total lands close to double the equity figure alone.

Yes, through a delayed purchase or a cash-out refinance. Delayed purchase lets you buy the lot with cash, get permit-ready, then close the construction loan and reimburse yourself for the land — which keeps the loan term from running during permitting.

No. If the home sells in month nine of an 18-month term, you pay it off with no penalty.

Later than most builders expect. Construction documents, structural, and Title 24 typically run three to four months, and municipal plan check plus any HOA architectural review can add another three to four. Closing a construction loan to buy the lot and then spending eight months getting permit-ready burns a third of your term before you break ground. Buying the lot with cash or negotiating a seller carryback, then closing as a delayed purchase, starts the clock at groundbreaking instead.