New Construction Loan (NCL)
?Lender will originate new construction loans for single family and multi‐family properties of up to 30 units. The terms a Borrower generally qualifies for (e.g. under Line of Credit or EL Program) will apply, subject to these additional parameters:
? The Borrower will purchase or contribute the land/lot, which must be fully entitled and developed (in accordance with the proposed project) with all required utilities and road infrastructure. The land must be free and clear of liens (other than liens that will be released with initial loan proceeds).
? Minimum loan size is $75,000.
?Lender will advance 60% of the lesser of: (i) the appraised value of the land, or (ii) Borrower’s cost basis in the land, until all applicable building permits are submitted. Once Borrower submits permits, Lender can advance an incremental 15% (from 60-75%). Lender, at it’s option, may require a partial or full repayment of the loan if all permits are not obtained within 4 months.
? If the Borrower otherwise qualifies for a loan-to-cost (LTC) in excess of the 75% land-based advance, such excess will be advanced prorata during the construction phase.
? If Borrower has owned the land for over a year, Borrower may request a loan based on the appraised value of the land, if Borrower pays for a land appraisal.
? Lender will generally require a specific land valuation, at Borrower’s expense, if Lender is lending more than $200,000 against land value.
? Loan Term - 9 months, with optional 1 point, 3 month extension.
? When a Borrower requests their first new construction loan with Lender, Lender will verify that the Borrower has liquid assets equal to 25% of the construction expenses.
? No prepayment penalty (3 months minimum interest).
Darin Daniels
Upstreet Financial