Fund Your Construction Project with Aspen Shadow
If you’re a residential builder or real estate developer than you need flexible financing that will allow you complete your project on-time and under-budget. Securing a construction loan with Aspen Shadow will give you the capital you need to ensure your next project is a success.
What Is A Construction Loan?
A construction loan is a short-term loan that covers the costs associated with a ground-up home construction project. Conventional bank lenders typically require significant down payments and equity that exceeds 25% of the project cost. With Aspen Shadow’s construction financing we can offer financing for 90% of the total project cost.
Key Phases of Construction
- Land Acquisition: Developers need to own land before seeking a construction loan, providing lenders with collateral and showing commitment to the project.
- Land Survey and Entitlements: Surveying establishes boundaries, while entitlements and utility access ensure the land is ready for the building.
- Financing: Construction loans, typically 12, 18, or 24 months, fund each phase, from groundwork to the final building.
- Groundwork (Grading/Excavation): This stage adds significant value to the land, increasing borrowing capacity.
- Framing and Building: The main construction phase, where loan funds are released progressively based on milestones.
Terms of Construction Loans
Construction loans cover up to 90% of project costs and their terms typically range from 12 to 24 months, with funds released as construction progresses. Developers must own the land, the groundwork improvements increase its value, which lenders can factor into the loan amount.
Groundwork Value and Land Ownership
Owning the land is a standard loan requirement, as it reduces the lender risk and expedites financing. Groundwork significantly raises land value, giving developers more borrowing power to enhance their projects.
Summary
Construction loans are key to bringing projects to life, with flexible terms aligned to the construction phases, by understanding loan structures and the impact o groundwork on land value, developers can optimize timing and financing for a successful build.