Land equity construction loans

Own the land? Start building.

If you own your lot free and clear, the land and what you’ve already spent on it count as your equity. The initial advance can be paid to you at closing, and that cash counts toward liquidity. Permits are not required to close.

Get a term sheet Price your deal

Rather talk it through? Call +1 (305) 857-5620

Do I qualify?

Five quick answers. No credit check, nothing saved.

Terms are subject to underwriting, appraisal, title, and insurance.

How it works

Your land is your equity.

Land owned free and clear counts as equity

Along with the costs you've already paid, such as plans and permits.

Cash at closing

The initial advance, up to 75% of land plus costs paid once permits are approved, can be paid to you. That cash counts toward liquidity.

No permits needed to close

You can close before permits are approved. The advance starts at up to 60% and rises once they are.

The build is funded by draw

Up to 100% of the remaining budget, released as each stage is inspected.

How the money flows

From your lot to a finished home.

Step 1
Cash to you at closing
$212,000
In the example below: the initial advance against the land, paid to the owner before closing costs.
Step 2
Draws by milestone
$425,000
The whole remaining budget, released stage by stage, typically within 1 business day of each inspection.
Step 3
Payoff
Sell the finished home, or refinance into a 30-year fixed DSCR rental loan with us and keep it.

Worked example

A lot owned outright, priced.

Here the land and the costs already paid make up all $113,000 of the owner's equity in the project.

Fictional scenario

Example: building on a lot you own free and clear

A builder with 6 completed builds owns a lot outright, has paid for plans and permits, and has no cash set aside for the build.

Land, owned free and clear: $300,000
Plans and permits already paid: $25,000
Construction budget: $425,000
Total project cost: $750,000
After-repair value: $1,000,000

What the loan looks like

Initial advance against the land65% of land plus costs already paid: $212,000
Construction budget, released by draw100% of the remaining budget: $425,000
Total loan: $637,000
Share of total project cost: 85%
Share of after-repair value: 64%

Sized by our pricing engine for this made-up deal, before closing costs. Your rate and final numbers come from your own term sheet.

Recent close

A ground-up build we funded.

A recent ground-up construction close
Ground-up construction loan, Charlotte, NC
Closed in
10 days
Financed
100% financing of the build costs plus soft costs

Questions

Land equity questions, answered.

Something not covered here? Email info@fundedcapital.com or call +1 (305) 857-5620.

Can I use my land as equity for a construction loan?

Yes. If you own the lot free and clear, the land and the costs you've already paid count as your equity in the project.

Can I get cash out of my land at closing?

Yes. The initial advance can be paid to you at closing: up to 75% of the land plus costs already paid once permits are approved, or 60% before. The whole loan still has to fit within the project's leverage limits.

Does that cash count toward liquidity?

Yes. Cash you receive from the initial advance counts toward the liquidity we look for in underwriting.

Do I need permits to close?

No, permits are not required to close. The initial advance is lower before permits are approved and rises once they are.

Which costs already paid count?

Money you've already put into the project, such as plans and permits, counts alongside the land. Send receipts or invoices with your application.

How much of the build do you fund?

Up to 100% of the remaining construction budget, released by draw as each stage is inspected. Draws are typically funded within 1 business day.

How is the loan sized?

On total project cost: the land, plus costs already paid, plus the remaining budget. Most builders can borrow up to 85% of that total, and builders with 20 or more completed builds up to 90%. The after-repair value is a second limit, and the lower of the two sets the loan.

What if there's still a loan on the land?

Then it's a refinance. We pay off the land loan at closing out of the initial advance, and everything else works the same way.

What credit score do I need?

680 or higher, the same as every new construction loan.

Send us the deal.

The application takes about five minutes. A loan officer reads it and sends a written term sheet.

Get a term sheet

Do I qualify?

Five quick answers. No credit check, nothing saved.

Terms are subject to underwriting, appraisal, title, and insurance.

Own the land? Start building.

Do I qualify?

Your land is your equity.

Land owned free and clear counts as equity

Cash at closing

No permits needed to close

The build is funded by draw

From your lot to a finished home.

Cash to you at closing

Draws by milestone

Payoff

A lot owned outright, priced.

Example: building on a lot you own free and clear

A ground-up build we funded.

Ground-up construction loan, Charlotte, NC

Land equity questions, answered.

Send us the deal.

Own the land? Start building.

Do I qualify?

Your land is your equity.

Land owned free and clear counts as equity

Cash at closing

No permits needed to close

The build is funded by draw

From your lot to a finished home.

Cash to you at closing

Draws by milestone

Payoff

A lot owned outright, priced.

Example: building on a lot you own free and clear

A ground-up build we funded.

Ground-up construction loan, Charlotte, NC

Land equity questions, answered.

Send us the deal.