Wondering what your borrower needs to qualify for a construction loan? Here are the key requirements:
- Borrower must have completed 3 or more projects of similar size and scope in the last 36 months. If not, the General Contractor must have documented experience with 5 or more projects in the same timeframe.
- Liquidity of 8-10% based on the loan amount is required.
- Minimum FICO score of 660 is necessary.
- Property cannot be located in a rural area.
- Construction loans are based on loan-to-cost, not loan-to-value. Loan to value only sets a cap on the total loan amount.
- Loan to cost includes both land value and vertical construction costs.
- Financing typically covers 75-80% of the total project cost.
We are experienced with working for construction and rehab loans. Contact our office to discuss further your projects in more detail.
