Construction Financing for Real Estate Developers
Ground-up development and major renovation financing—from land acquisition through stabilization.
Building Your Vision Requires the Right Capital Partner
Ground-up construction is one of the most complex—and rewarding—strategies in commercial real estate. It's also one of the most challenging to finance. Lenders must underwrite not just the borrower and the land, but the execution risk of building something that doesn't yet exist.
Brookmont Capital Ventures helps developers navigate the construction lending landscape, structuring financing that aligns with your project timeline, budget, and exit strategy. We work with banks, debt funds, and SBA lenders to find capital solutions that get your project out of the ground and into the market.
Projects We Finance
Ground-Up Multifamily
New apartment construction, from garden-style communities to mid-rise urban infill. We structure financing for market-rate, workforce, and affordable housing developments.
Mixed-Use Development
Retail/residential, office/residential, and live-work projects that combine multiple uses in a single development. See how we helped structure financing for a mixed-use ground-up development.
Commercial Build-to-Suit
Owner-occupied and investor-driven commercial construction, including office, retail, medical, and industrial facilities.
Adaptive Reuse
Converting existing structures—warehouses, offices, hotels, churches—into new residential or commercial uses.
Substantial Rehabilitation
Major renovation projects that go beyond cosmetic improvements to include structural, mechanical, and system upgrades.
Construction Loan Structure
Construction loans are structured differently than permanent financing:
Draw Schedule Funding – Rather than receiving the full loan at closing, funds are disbursed in stages as construction milestones are completed and inspected. This protects the lender and keeps capital aligned with project progress.
Interest Reserve – Since the property won't generate income during construction, most loans include a reserve account to cover interest payments during the build period.
Completion Guarantees – Lenders typically require sponsors to guarantee project completion, ensuring the development will be finished even if costs exceed budget.
Construction-to-Permanent Options – Some lenders offer single-close loans that convert to permanent financing upon completion, eliminating refinance risk and reducing transaction costs.
Typical Terms
| Parameter | Typical Range |
|---|---|
| Loan Amount | $1M – $50M+ |
| Loan-to-Cost | 65-80% |
| Loan-to-Value (Completed) | 70-80% |
| Term | 18-36 months (plus extensions) |
| Interest Rate | 7-11% (varies by lender and deal) |
| Recourse | Full or partial recourse typical |
| Equity Requirement | 20-35% of total project cost |
*Terms vary based on project type, sponsor experience, and market conditions.
What Lenders Require
Construction lenders evaluate both the project and the sponsor. Be prepared to demonstrate:
Project Documentation
- Architectural plans and specifications
- Detailed construction budget with line-item costs
- Construction timeline with milestone schedule
- General contractor agreement and GC financials
- Permits, entitlements, and zoning confirmation
- Environmental and geotechnical reports
Sponsor Qualifications
- Track record with similar projects (scope, asset type, market)
- Personal financial statements and liquidity
- Credit history and net worth
- Development team experience (GC, architect, PM)
Exit Strategy
- Pro forma showing projected income upon stabilization
- Permanent financing assumptions or pre-sale commitments
- Market analysis supporting absorption and pricing
Capital Sources
We work with multiple construction lender types to find the right fit:
Regional and National Banks – Competitive rates for experienced developers with strong banking relationships. Typically require full recourse and conservative leverage.
Debt Funds – Higher leverage and faster execution for sponsors who don't fit traditional bank criteria. More expensive but more flexible, similar to bridge financing.
SBA 504 Loans – For owner-occupied construction (51%+ occupancy), SBA programs offer low down payments and below-market fixed rates. Ideal for businesses building their own facilities.
Credit Unions – Local knowledge and relationship-based lending. Often competitive for smaller projects in their geographic footprint.
Our Construction Financing Process
Project Review
Submit your development plans, budget, and timeline. We evaluate feasibility and identify appropriate lenders.
Lender Matching
Based on project size, location, and sponsor profile, we target lenders most likely to offer competitive terms.
Package Preparation
We help you assemble institutional-quality documentation that meets lender expectations and accelerates underwriting.
Term Sheet Negotiation
Receive and compare offers from multiple lenders. We advocate for borrower-friendly terms, including interest reserves, extension options, and prepayment flexibility.
Due Diligence and Closing
Coordinate third-party reports, contractor vetting, and documentation through closing.
Draw Administration Support
We remain available to assist with draw requests and lender communication throughout construction.
Why Developers Choose Brookmont
Deep Lender Relationships – We know which lenders are active, what they're looking for, and how to position your deal for approval.
Development Experience – Our team understands construction budgets, timelines, and the challenges developers face. We speak your language.
Efficient Execution – Time kills deals. We move quickly to get you term sheets, resolve underwriting issues, and close on schedule.
Full Capital Stack Advisory – Need equity alongside your construction debt? We can help structure preferred equity, JV partnerships, or LP capital to complete your capital stack.
Ready to Finance Your Development Project?
Whether you're breaking ground on your first project or your fiftieth, Brookmont Capital Ventures can help you structure construction financing that matches your business plan.
Questions? Contact our team at info@brookmontcapital.net
Brookmont Capital Ventures is a capital advisory firm. We do not provide direct lending services. All financing is subject to lender approval and underwriting.