To move efficiently from initial review to a Letter of Intent (LOI), we require a clear set of project details. Providing this information upfront allows us to evaluate feasibility, structure terms accurately, and avoid unnecessary delays.
Below is an overview of what’s needed to begin the LOI process.
1. Developer Experience
Experience matters in construction lending.
We require details outlining the developer’s background, including:
- Prior completed projects
- Project types and sizes
- Years of experience
- Roles played in past developments
To streamline this review, we provide a Developer Questionnaire that captures the specific information our underwriting team needs to assess experience and execution capability.
2. Personal Financial Statement (PFS)
A Personal Financial Statement is required for all guarantors associated with the project.
This information helps us evaluate:
- Net worth and liquidity
- Overall financial strength
- Ability to support the project through completion
Each guarantor must submit a complete and current PFS as part of the initial review.
3. Project Proforma (Hard & Soft Costs)
A detailed project proforma is essential for construction financing.
The proforma should include:
- Hard costs (construction, materials, labor)
- Soft costs (architectural, engineering, permits, legal, financing costs)
- A clear breakdown of prepaid costs
- Remaining costs to complete the project
Separating prepaid costs from future costs allows for accurate loan structuring and draw scheduling.
4. Property Address & Existing Liens
We require the full project address, along with:
- Cost of land acquisition
- Any outstanding liens or existing financing on the property
This information is necessary to evaluate title, current encumbrances, and overall project capitalization.
5. Borrowing Entity Information
Please provide the legal name of the borrowing entity that will hold title to the property and enter into the loan.
This allows us to:
- Confirm entity structure
- Review ownership
- Prepare accurate loan documentation
6. Estimated Future Value of the Completed Project
An estimate of the future value upon completion is a key component of construction loan underwriting.
This figure helps determine:
- Loan-to-cost (LTC)
- Loan-to-value (LTV) at stabilization
- Overall project viability
Supporting assumptions or market data are helpful, but not required at the LOI stage. By providing the information outlined above, you help us move quickly toward issuing an LOI and setting clear expectations from the start.
Contact us to begin the process and discuss your construction loan options.
