Commercial Construction Loans

Commercial Construction Loans



Developers and Mortgage Brokers – Learn How Apartment Construction Lenders and

Commercial Construction Lenders Underwrite

Need an apartment construction loan or a commercial construction loan?  Are you building an office building, retail center, industrial building, or any other type of income-producing property?  Want to apply in just four minutes to our 500 commercial construction lenders right now?  If so, please click here.

Here is how your apartment construction loan or your commercial construction loan will be underwritten.  The first test is the Profit Test.   Will your finished project be worth more than it will cost to construct?

A related test is the Loan-to-Value Ratio.  After the project is completed and, say, your strip center is occupied, will the construction loan be less than, say, 75% loan-to-value.

Some of our construction lenders are so hungry for deals that they might even allow 80% loan-to-value.  But if you still need more equity, it may be possible for you to obtain a mezzanine loan.

Apartment construction lenders and commercial construction lenders often will not trust the appraisal.  Instead, they will look to the Loan-to-Cost Ratio.  What percentage of the total cost is the construction lender being asked to cover?

Historically developers were asked to cover at least 20% of the total cost of the project, usually in the form of free and clear land.  After all, the coonstruction lender wants the developer to have some skin in the game.

Modernly, however, apartment construction loans or commercial construction loans up to 90% of cost, or more, are possible.  And if the developer needs even more leverage, a mezzanine loan is sometimes possible.

Will the apartment construction lender or commercial construction lender be able to get out of the deal?  If you build your strip center, will the center make enough money to qualify for a takeout loanlarge enough to pay off the construction loan?

To determine if the takeout loan is large enough to pay off the apartment construction loan or the commercial construction loan, the construction lender will compute the Debt Service Coverage Ratio.  The ratio must usually be larger than 1.25.  In other words, the net income from the project must be 25% larger than the proposed payments.

Finally the apartment construction lender or commercial construction lender will look to the developer’s Net-Worth-to-Loan-Size Ratio.    Generally the developer’s net worth should be at least as large the loan amount.

On C-Loans you will find at least 50 apartment construction lenders or commercial construction lenders for any size of apartment project or commercial project that you are ready to build.

To apply now, please click here.


When it comes to construction financing, a quick closing can mean the difference between a profitable project built on time and under budget or another lost opportunity. Given the risk that comes with rapidly changing market conditions, SFG’s deal certainty can be a game changer for the experienced builder. While banks are still in loan committee, SFG’s construction borrowers are out of the ground and on their first or second draw. SFG’s construction loan program is the fastest, simplest financing of its kind in the market today.

SFG’s Construction Department is managed by Jim McBride, a construction professional who has been with SFG since 2001. Prior to the close of a construction loan, Jim works closely with the applicant/owner/builder to analyze the essential elements of the project, including the budget, plans, specs, permit status, site conditions, GC and the construction team. After close, Jim continues to work closely with the builder throughout the construction process, up to the point of completion. Jim’s experience, dedication and focus are a tremendous value add for SFG and builders alike. Our many long-term construction relationships and repeat opportunities stem from Jim’s commitment to a quality experience and result for all involved.



Borrowing entities and credit requirements

  • Owner, builder, spec or custom home construction
  • Individuals, corporations, LLCs, partnerships, trusts, estates, foreign nationals, etc.
  • Combine multiple borrowers or multiple entities in a single transaction
  • SFG’s decisions are based on the quality of the project
  • Ground-up or broken priority

Property types and requirements

  • Spec residential – attached, detached, in-fill, high end fix & flips, multi-family or broken projects
  • Commercial projects can include acquisition financing and asset repositioning
  • Ground-up or construction completion and broken priority…and we can finance the acquisition, too

Realistic construction periods

  • Up to 24 months, or more, depending upon the scope of the project
  • Can accommodate multiple phases and sensible, market driven partial releases
  • No prepayment penalties or yield maintenance

In-house construction department

  • SFG manages its own construction fund controls and inspections for projects throughout the west
  • Quick, flexible dispersals. One-week turnaround on draw requests
  • Custom draw schedules that support your project
  • SFG’s experienced construction manager is on staff and at your service

Responsive portfolio lender

  • SFG doesn’t rely on credit lines or depend on reselling to the secondary market
  • Offers the creativity and flexibility that comes with being a true portfolio lender
  • The ability and willingness to structure sensible solutions to your construction financing needs

Simple application process

  • Call or e-mail your SFG underwriter your loan request
  • Visit our website for SFG’s construction loan application

Fast answers

  • Same-day turnaround on SFG’s expression of interest
  • We know our markets and can get to deal certainty while the bank is still asking questions

3 Quick Thoughts When Constructing Your Next Construction Loan Request




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