Construction Loan Requirements
“Here Is A Fairly Comprehensive List of Construction Loan Requirements That May Be Required By A Construction Lender”
If you’re planning a construction project that requires construction financing, here is a broad based list of borrower requirements that you may have to provide with your application. The larger the project, the more likely more of these items will be relevant to you.
- Building Plans
- Floor Plans
- Property Elevations
- Artist Renderings of the finished project.
- Construction Budget
- Land Acquisition Cost
- Hard and Soft Costs
- Building Materials
- Contractor Fees
- Building Permits.
- Sewer and Water Hookup
- Lot Levies
- Architect fees
- Legal Fees
- Appraisal Fees
- Interest Costs and Mortgage Broker Fees
- Contingency Allowance
- GST
- Site Supervision
- Overhead
- Construction Contracts and terms
- Cash Flow Projections Outlined by Activity and Timing.
- Offer To Purchase
- Offer To Lease
- Projected Income Statement For The Project
- Phase I Environmental Report
- Project Feasibility Studies
- Absorption Analysis
- Recent Appraisal
- Purchase and Sale Agreement
- Borrower Information
- Personal Net Worth Statement
- 3 Years Historical Financial Statements
- Credit Report
- Related Construction Experience
Remember that this is far from an exhaustive list as other information can be requested, depending on the specific nature of the project. In many cases, approvals will be granted subject to certain additional information being provided, or previously provided information being resubmitted in a more acceptable fashion.
The application of these requirements will vary considerably from one project to the next, but at least you have a better idea of the things that can be asked for when applying.
Commercial projects will require more of these items that single family unit projects, but even home owner build situations can require significant amounts of information, especially when applying for institutional construction financing.
Right now, the lending market has tightened up due to the recent economic recession. As a result, more requirements are being asked for that in the past, so the more pre planning you can invest in your project, the better your chances will be of securing the type of construction financing you’re looking for.
To better understand what items would directly apply to your project, I suggest that you give me a call so I can provide you with a customized list of the mortgage lender requirements that are likely going to be the most relevant for your project.
Click Here To Speak With Construction Mortgage Broker Joe Walsh
About the Author Joe Walsh
I'm a Toronto Mortgage Broker that arranges mortgage solutions on residential and commercial real estate property. With over 30 years of mortgage financing experience, I'm able to quickly assess your financing requirements and provide relevant solutions for your immediate consideration. Joe Walsh Google+ YouTube Channel