Ground-up construction

New Construction Loans

Capital for building from land or plans through to a completed asset.

Offered Term Sheet within 12-24 hours

A steel frame going up, with a tower crane placing the next beam

What a New Construction Loan Is

Ground-up construction financing funds the build as it happens. Land or lot cost, the construction budget and the finished value are assessed together, and money is released against progress rather than in one lump. Because construction carries execution risk, the sponsor's track record matters as much as the project itself.

A new construction loan is a short-term hard money loan for building a property from the ground up, on a vacant lot or after a teardown. Unlike a purchase loan, most of the money is not spent on day one. It is released in stages as the building goes up.

Apex funds up to 100% of the construction budget, released in draws against progress. The lot can already be yours, or its purchase can be included in the financing, with the lot cost and the build assessed together. The loan is repaid when the finished property is sold or refinanced into long-term financing.

Building carries more risk than renovating. Weather, permits, inspections, material prices and subcontractor schedules can all move the timeline. That is why the sponsor's record of finished projects matters as much as the project itself, why approved plans are required before closing, and why a licensed general contractor is typically required.

Key Highlights

Up to 100% of the construction budget
Land or lot cost and build budget assessed together
Capital released in stages against construction progress
Ground-up and infill projects
Your completed projects count toward approval
Transparent, competitive rates — no hidden fees

How a New Construction Loan Works, Step by Step

01
Lot, plans and budget
Line up the lot, the approved plans and a detailed construction budget, ideally broken out line by line by your general contractor.
02
Send the project
Share the lot details, plans, budget and expected value of the finished property, along with your completed projects. A term sheet comes within 12 to 24 hours.
03
Underwriting
The lot, the budget and the finished value are assessed together. Your track record, credit and contractor are reviewed.
04
Close
Approved plans are required before closing. Permits do not have to be in hand to close, but they must be before the first draw.
05
Build and draw
The budget becomes a schedule of values. Funds are released as stages are finished and inspected, often at foundation, framing, dry-in, mechanical rough-in, finishes and certificate of occupancy.
06
Sell or refinance
Once the certificate of occupancy is issued, the property is sold or refinanced, for example into a DSCR rental loan if you keep it as a rental, and the hard money construction loan is paid off.

Who It Suits

Builders developing on land they already own
Sponsors acquiring a lot and building on it
Developers working on infill projects
Experienced operators with completed ground-up work behind them

Common Uses

Building a home for sale on a lot you already own
Buying a lot and building on it with one loan
Infill projects on vacant or teardown lots in established neighborhoods
Building a rental to hold, then refinancing out of the hard money loan into a DSCR loan
Spec building for builders with completed projects behind them

When Another Loan Fits Better

If the building is already standing and needs work, a fix and flip loan is usually the better tool, with up to 100% of the rehab budget funded through draws.

Track record carries real weight on construction files. If you have not built before, completing renovation projects first builds the history that ground-up lending looks for.

These are business-purpose loans for investment property, not for building a home you will live in.

What We Look At

Every construction file is reviewed by a person. These are the parts of a ground-up deal that carry the most weight.

01

Funded In Stages

Capital released against construction progress.

02

Land And Build Together

Lot cost and construction budget assessed as one.

03

Track Record Counts

Your completed projects form part of the picture.

Land, plans and permits

The land does not have to be owned free and clear. Lot acquisition can be included in the financing, with the lot cost and the build assessed together.

Approved plans are required before closing. Permits are not required to close, but they must be in hand before the first draw is released.

A licensed general contractor is typically required.

Land: Can be owned outright or financed as part of the loan
Plans: Approved plans required before closing
Permits: Not required at closing; required before the first draw
Contractor: A licensed general contractor is typically required
Construction budget: Up to 100% of the budget, released in stages against progress

How construction draws work

Construction money is not advanced in a lump sum. The budget is broken into a schedule of values, and funds are released in stages as the work is finished and inspected, typically at foundation, framing, dry-in, mechanical rough-in, finishes and certificate of occupancy.

That is how construction lending works generally; the draw count and inspection arrangements on your own file are set deal by deal.

A Sample Ground-Up Build, Worked Through

The lot is assumed to be owned outright to keep the math simple. Draw stages and amounts on a real file are set deal by deal and shown on your term sheet.

Lot (already owned): $100,000
Construction budget: $400,000
Construction funds at up to 100% of budget: Up to $400,000
Draw 1: foundation: $40,000
Draw 2: framing: $80,000
Draw 3: dry-in (roof, windows, doors): $60,000
Draw 4: mechanical rough-in: $80,000
Draw 5: finishes: $100,000
Draw 6: certificate of occupancy: $40,000
Total cost, lot plus build: $500,000
Projected value when finished (assumed): $650,000

Draws reimburse finished, inspected work, so the builder needs cash or credit to carry each stage until its inspection clears. Permits must be in hand before Draw 1 is released.

The $150,000 between total cost and finished value is not profit. Interest, points, closing and selling costs, insurance, taxes and any overruns come out of it. A contingency line in the budget is the usual protection against overruns.

All financing programs, rates, leverage, terms, and closing timelines are subject to lender guidelines, underwriting approval, property eligibility, satisfactory due diligence, and borrower qualifications. A preliminary review or quote is not a commitment to lend.

New Construction Loan FAQs

Is a construction loan a hard money loan?

Investor construction loans like this one are short-term hard money or private money loans. They are based on the lot, the budget, the finished value and the builder, and they are repaid by a sale or a refinance when the build is done. They are different from a bank's construction loan for a home you will live in.

How much of the build can be financed?

Up to 100% of the construction budget, released in stages against progress. Lot acquisition can also be included, with the lot cost and the build assessed together. The term sheet sets out the exact amounts for your project.

Do I need to own the land free and clear?

No. The land can be owned outright or financed as part of the loan. If you are buying the lot, send the purchase contract with the plans and budget so the lot and the build can be assessed together.

Do I need permits before closing?

Approved plans are required before closing. Permits are not required to close, but they must be in hand before the first draw is released.

How do construction draws work?

The budget is broken into a schedule of values. Funds are released as each stage is finished and inspected, typically at foundation, framing, dry-in, mechanical rough-in, finishes and certificate of occupancy. The draw count and inspection arrangements on your file are set deal by deal.

Do I need construction experience?

Your track record matters as much as the project. Completed projects count toward approval, and a licensed general contractor is typically required. If your experience is limited, send the deal anyway and we will tell you plainly how it looks.

What are the rates on a construction loan?

Rates depend on the project, the leverage and your experience, and they are set deal by deal. A term sheet with the numbers comes within 12 to 24 hours of receiving the plans and budget.

Can I build a home to live in with this loan?

No. These are business-purpose loans for investment property, such as homes built to sell or to rent.

Application

Tell Us About The Deal

The more detail you give, the faster we can come back with something useful. Everything is reviewed by a person.