How Much of the Land and Build Will a Lender Finance?

Most of it, and the land is included. Experienced builders can get up to 90% of the total project cost (land plus construction), with 100% of the construction budget funded through draws. First-time builders can usually get 75% to 85% of total cost. Either way, the loan is capped at about 60% to 75% of the finished value, depending on your experience.

How the land is financed

The land is part of the total, not a separate loan. With 100% of construction funded, a 90% loan covers the land minus your 10% share of the whole project. Example for an experienced builder: a $50,000 lot and a $100,000 build is $150,000. At 90%, the loan is $135,000 and you bring $15,000 plus closing costs. If you already own the lot, it counts toward your share. Documented money you've already spent on it, like site prep, can count too.

What lenders want to see

A complete set of plans and a detailed budget, because the lender sets the finished value before the build starts. Most lenders also want permits in hand before the first draw. Experience means completed ground-up builds, and some lenders give partial credit for large renovations or additions. Credit minimums usually start around 660 to 680.

Draws, term and the exit

Construction money is paid in draws as each stage is finished and inspected, so plan cash to get the first stage done. Some lenders can build several months of interest into the loan. Terms usually run 9 to 12 months, and some lenders go to 18 or 24 months for larger builds. When the home is done, you sell it, or keep it and refinance into a 30-year fixed rental loan. We finance ground-up construction on 1-4 unit homes across North Carolina, Georgia and Virginia.

Related questions

Ground-up construction loans

Can one lender finance a BRRRR purchase and refinance?

Can you refinance right after a rehab?

Investment property only. Business-purpose loans, never owner-occupied. Terms vary by experience, credit, liquidity, and project strength. Subject to underwriting and approval. Not every deal or borrower will fit every program. This is not a commitment to lend.