Building a property is a complex and challenging process, but with the right loan options and strategies, you can significantly reduce construction costs. Feng Capital’s Ground Up Construction Loan is designed to provide flexible funding support for experienced developers and investors. Whether you’re purchasing land to build, renovating, or developing a new property, this loan option has you covered! Here’s a complete guide to how construction loans work, the ideal scenarios for their use, and the benefits they offer.
1️⃣ How Construction Loans Work
Feng Capital’s construction loans are tailored specifically for new construction projects and are different from traditional home loans. These loans are primarily intended to cover land acquisition and building costs, making them ideal for developers and investors looking to start from the ground up. Key features of this loan type include:
Funds Disbursed in Stages: Loan funds are released in stages based on the progress of the project, ensuring efficient use of capital and easing the borrower’s financial burden.
Short-Term Flexibility: With typical terms of 6-24 months, construction loans offer flexibility, and upon project completion, they can be converted into a long-term mortgage.
Broad Eligibility: Feng Capital’s construction loans are available nationwide (excluding AK, DE, MN, ND, NV, SD, UT, and VT) and cover a wide range of properties, including single-family homes, multifamily units, apartments, townhouses, and mixed-use properties.
Ideal Scenarios for Construction Loans
Feng Capital’s construction loans are well-suited for a variety of construction needs:
Land Purchase and Building: Covering up to 50% of land costs, construction loans are ideal for both single-family and multifamily residential projects.
Property Renovation or Rebuild: Perfect for transforming old properties or conducting structural rebuilds.
New Developments: Designed specifically for developers with prior project experience.
2️⃣ Why Choose Feng Capital’s Construction Loans?
High Leverage: Feng Capital offers up to 100% of construction costs and 50% of land purchase costs, significantly reducing the upfront capital requirements. Note: Loan-to-ARV (After Repair Value) ratio must be 75%, meaning the loan amount cannot exceed 75% of the property’s projected post-construction value.
Flexible Repayment Options: Construction loans are typically interest-only with terms of 6-24 months. After completion, borrowers can choose to convert the loan into a traditional mortgage or quickly repay it through property sale.
Effective Cost Control: By disbursing funds in stages according to project progress, construction loans help control the project budget, reduce overall interest costs, and ensure efficient use of funds throughout the build.
Feng Capital’s Ground Up Construction Loan is designed for developers and investors who want to start from scratch with new builds. With its flexible loan terms and high leverage, it’s an ideal solution to help manage early-stage capital demands. If you have a construction project in mind or want to learn more about our loan options, contact our team today for expert support!
📞 Phone: 516-820-3456
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