How Does a Ground-Up Construction Loan Work?

A ground-up construction loan pays to build a property from bare land. The lender usually does not hand over the full amount at closing. Money is released in draws as each stage is finished and inspected: foundation, framing, dry-in, finish.

What the lender checks: the land (owned or under contract), full plans and a line-item budget, permits or a clear path to them, the builder's track record, and what the finished property will be worth.

What to gather first: the land contract or deed, architectural plans, the budget, your builder's resume, and your exit. That means selling the finished property, or refinancing into a long-term loan once it is leased.

SixtyFour West places your deal with lenders whose rules it fits.

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