New Construction Loans / Infill Loans
Finance your new construction investment with a simple, streamlined lending process and competitively priced capital.
What Are New Construction Loans?
New construction loans are short-term financing options used to cover the costs of building a new property. Infill loans are a subset of these, designed for building homes or developments on vacant or underutilized lots in established neighborhoods (infill areas). Both typically require a mortgage,
or the client can flip the property for a profit.
How New Construction Loans Work
New construction loans finance building a home. They typically cover land purchase, construction costs, and interest during the build. Funds are released in stages (draws) as milestones are completed. Borrowers make interest-only payments during construction. Once complete, the loan converts to a typical
mortgage, or the client can flip the property for a profit. Approval requires plans, a builder contract, and a down payment, with stricter qualifications than traditional loans.
How To Use a New Construction Loans
New construction loans finance building a property from scratch. They cover land purchase, construction costs, and labor. Funds are released in stages as construction progresses. Once complete, the loan can be converted into a standard mortgage or the property can be sold for profit to exit. Prepare plans, budget, and builder details to apply.
Develop and Sell
This strategy allows investors to capitalize on rising property values, especially in high-demand areas, without tying up personal capital.
Build and Rent
You benefit from a brand-new property with minimal maintenance and strong appeal to tenants, and you can build equity quickly by leveraging the loan.
Refinance
Use your own cash to purchase a property and restore your original cash position within 6 months of the purchase.
Why Apply for a New Construction Loan?
Take Additional Projects
It’s great to take on multiple projects when the seasons are nice. Using a new construction business loan gives you the freedom to work on more than one build and have plenty of money to do it.
Flexible Financing
New construction loans provide financing in stages, allowing investors to pay for the project as it progresses. This reduces the upfront capital burden.
Increased ROI
New construction projects typically have higher resale values compared to older properties due to their modern designs and minimal maintenance needs.
Minimum Eligibility Requirements
Getting a new construction loan is easy when you meet these minimum requirements. Find out how much you can get when you apply today.
Better Your Business With Premier Lend Partner
New Construction Loans FAQ
A new construction loan is a short-term loan designed to finance the building or renovation of a property. It typically covers the cost of land, construction materials, labor, and sometimes permits or design fees. Once the project is complete, it often converts into a permanent mortgage or must be refinanced. The property can also be flipped or sold , not just refinanced but also with an exit strategy of selling.
- Draw Schedule: The loan is disbursed in phases as the construction progresses (foundation, framing, etc.).
- Interest Payments: Borrowers typically pay interest only on the funds disbursed.
- Finalization: After construction, borrowers either refinance into a permanent mortgage or pay off the loan in full.
- Credit Score: Typically 660 or higher is required.
- Down Payment: Ranges from 10% to 30% of the total project cost.
- Detailed Plans: Lenders require blueprints, budgets, and timelines for the project.
- Builder Approval: A licensed and experienced builder is usually required.
- Project Delays: Weather, labor shortages, or supply chain issues can impact the timeline.
- Cost Overruns: Unexpected expenses may exceed the initial budget.
- Market Risks: A downturn in the real estate market could affect the final property value.
Get Financing Today
Get started with your application and join Premier Lending Partner of forward-thinking businesses.