What it is used for
- Ground-up multifamily, build-to-rent and for-sale projects
- Heavy rehab and gut renovations
- Adaptive reuse and property conversions
- Commercial and mixed-use development
How it is typically structured
- Funding
- Disbursed in draws against completed work, verified by inspection
- Leverage
- Sized to loan-to-cost and loan-to-completed-value; sponsors should expect meaningful equity in the project
- Term
- Commonly 12 to 36 months, often interest-only during construction
- Exit
- Refinance into permanent debt, sale of the property, or unit sales
Terms vary by lender, property and borrower. This is general market information, not a quote or commitment.
What lenders look at
- Detailed hard and soft cost budget
- Approved plans, permits and entitlements
- General contractor experience and contract
- Sponsor track record on similar projects
- Completed value and a realistic exit
What you will need
- Plans, specifications and permit status
- Line-item construction budget and schedule
- General contractor contract, license and insurance
- Land or property purchase documents
- Sponsor resume, personal financial statement and schedule of real estate owned
Your portal checklist is generated from your deal, so you are only asked for what your file needs.
How DealRail places it
Construction appetite changes quickly and differs sharply by market and product. We match the project to lenders currently funding that product type in that market, and we flag budget or exit gaps before the file goes out.
Common questions
How much equity do I need for a construction loan?
It depends on the lender, the project and the sponsor. Most construction lenders expect the sponsor to fund a meaningful share of total project cost, and land already owned can sometimes count toward that equity.
What is a construction draw?
A draw is a disbursement of loan funds as construction milestones are completed. The lender typically orders an inspection to confirm the work before releasing each draw.
Can a construction loan convert to a permanent loan?
Some lenders offer construction-to-permanent loans that convert after completion. More often, the construction loan is refinanced with a separate permanent or bridge loan once the property is complete or stabilized.