Capital to build non-owner-occupied residential and mixed-use projects — funding land and vertical costs in draws tied to your construction milestones.
A ground-up construction loan is short-term, business-purpose financing to build an investment property from the dirt up. Instead of qualifying on personal income and tax returns, the deal is underwritten on the project — the lot, the construction budget, the plans and permits, your build experience, the projected as-completed value, and your exit. The loan can fund the land plus the vertical construction, and the money is released in draws as work is completed and verified, so you aren't paying interest on the full loan amount before it's actually deployed.
CapitalBridge Lending helps real estate investors and builders access private lending options for ground-up construction and build-to-rent projects.
Ground-up single-family and spec homes, small infill and 2–4 unit residential, build-to-rent projects, and select mixed-use — all non-owner-occupied and held for investment. Collateral is the land plus the vertical construction.
Illustrative scenario for education — not an actual client, quote, or commitment to lend.
A regional builder owns an infill lot in an established neighborhood — bought for roughly $120,000 — and has permitted plans, a general contractor under contract, and a line-item budget of about $380,000 to build a single-family spec home. Comparable finished homes in the area support an as-completed value near $680,000. The builder has cash for soft costs but doesn't want to tie up working capital in the full vertical construction.
Total project cost lands around $500,000 (land plus construction). Paying that out of pocket would drain the builder's reserves and stall their other projects. A conventional bank construction loan meant a slow, income-heavy approval and personal tax-return underwriting the builder wanted to avoid on a business-purpose deal.
An asset-based construction loan is sized on loan-to-cost — the land value plus the construction budget — subject to underwriting. The land portion funds at closing, and the construction budget is held back and released in draws tied to milestones: foundation, framing, dry-in, mechanicals, and final. Each draw is requested as that stage completes and is verified (often by inspection) before funds release. Because interest is charged only on what's actually been drawn, the builder isn't paying interest on the full construction budget on day one. A modest interest reserve can be built into the loan so early monthly payments come from the reserve rather than out of pocket while there's no income during the build.
With the vertical costs financed in draws, the builder kept reserves free for other deals and only carried interest on funds as they were deployed. The home was completed on schedule and listed near the $680,000 target. On a build-to-rent variation of the same deal, instead of selling, the builder would refinance the completed property into a long-term DSCR rental loan — paying off the construction loan and holding the home as a cash-flowing rental.
General ranges — actual terms depend on the lot, construction budget, plans and permits, as-completed value, builder experience, market, and final underwriting.
| Item | General Range |
|---|---|
| Loan size | Program-dependent; typically mid-six-figures up to several million |
| Leverage | Loan-to-cost based leverage on land + construction, subject to as-completed value and underwriting |
| Construction draws | Budget held back and released in draws as milestones are completed & verified by inspection |
| Interest reserve | Interest reserve may be structured into the loan to cover payments during the build |
| Term | Short-term to match the build timeline, with extension options |
| Docs | No tax returns required on most business-purpose programs |
| Exit | Sale on completion, or refinance into a long-term DSCR rental loan for build-to-rent |
| Closing | Subject to title, appraisal/feasibility review, and permitted plans |
Pricing, leverage, fees, reserves, draw structure, and closing timelines vary by program, borrower profile, collateral, market, project type, budget, plans and permits, documentation, title, appraisal, and final underwriting. Any examples are for discussion only and are not a commitment to lend.
The construction budget is held back at closing and released in draws as each stage of the build is completed and verified — commonly foundation, framing, dry-in, mechanicals, and final. You request a draw as that milestone finishes, an inspection confirms the work, and funds release.
Typically no. Interest is generally charged only on the funds you've actually drawn, so you aren't paying on the full construction budget before it's deployed. An interest reserve can also be structured into the loan to cover payments during the build.
Often, yes. Many construction loans fund the land at closing and hold back the construction budget for milestone draws — sized on loan-to-cost, subject to underwriting.
You'll ultimately need approved plans, permits, a signed GC contract, and a line-item budget with a draw schedule. If you're not fully there yet, send us the scenario and we'll tell you what's still needed.
Your exit is either a sale on completion or, for build-to-rent, a refinance into a long-term DSCR rental loan that pays off the construction loan and lets you hold the property as a rental.
Yes — construction loans are business-purpose and commonly close in an entity such as an LLC.
Send us the lot, the construction budget, and the as-completed value — we'll tell you quickly whether a ground-up construction loan fits and what the next steps are.
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