Construction Loans
Construction (or rehabilitation) loans are short-term, usually 12 to 18 months in duration, used to build or rehabilitate a physical structure.
Eligible Expenses
The following activities and associated costs are eligible predevelopment expenses, including but not limited to:
- Construction-related expenses
- Building inspection
- Project-related overhead (including administrative and staff costs)
- Site preparation/demolition
- Financing fees
- Professional fees including legal, accounting, architectural and consultants
- Title and recording fees
Loan Terms
- Interest rate: Fixed for the term of the loan
- Repayment: Varies on a case-by-case basis
Loan Review
In addition to the normally requested information, the applicant will be required to submit the following supporting documentation:
- Financial pro-formas: (1) preconstruction sources and uses budget and (2) concept development budget; and (3) preliminary operating budget
- Preliminary letters of commitment from funders, if available
- Corporate or individual resumes of development team currently selected, including project manager, architect, attorney, consultants
- Project timeline, including at the minimum the following milestones: full financing; zoning approval (if applicable); construction start; construction completion; rent-up or sales started/completed
- Description of the beneficiaries and benefits of the project
- Site plan
- Photographs of site/building
- Appraisal (if available)
- Phase 1/Phase 2 environmental report (if available)
- Feasibility study
- Marketing plan
Learn more about other loan products available:
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PROJECT EXAMPLES
