Ground up-financing – what you should know!

Nothing says personalized like a custom home you built. It is unique because you get to pick every aspect of the property in order to capitalize on the latest market trends. The unique part about a spec home loan is that you won’t be using a simple mortgage payment to pay it off. We created a guide that tells you everything you need to know about financing someone’s dream build.

Property types

Ground-up construction loans (or spec-home loans) are available for specific types of property, including single-family homes, townhomes, 2-4 unit properties and some multi-family homes.  If you are looking for a fix-and-flip or a bigger commercial project, Lendmarq also offers loans to help you complete your project.

Be prepared 

Lendmarq is more than happy to help you finance your build. However, you will need to have a few details in place before coming to see us. You will need to ensure your previous build history is put together and in order so we can review it for eligibility. The obvious big tasks you need to have completed are choosing the lot, preparing your detailed budget, and drawing up the plans. This allows us to best assist you with financing your ideal property.

Loan Term

A construction loan is considered a short-term loan. This means we will offer you terms for twelve to twenty-four months. However, we understand that when building a home, there are moving pieces, and things can easily be shifted or moved around.  The key is to be prepared for those bumps and bruises and make sure that you have enough time to handle unexpected delays.  Many customers think that financing begins at the time of property acquisition.  However, Lendmarq usually does not close the construction loan until the building permit is in place.  This allows the vast majority of borrowers to complete the project within the allotted time for the loan.


Instead of worrying about taking out multiple loans for the lot and materials, Lendmarq combines them into one. We can finance up to 50% of the land purchase price and 100% of the construction budget, subject to 75% of the completion value.   As noted above, we do not typically close construction loans before the building permit is in hand, loans can be treated like a “delayed purchase” which allows some cash recapture for the funds used to purchase the land if there is room.  Construction loans do not exceed 85% of the total project costs (the price of the land plus construction costs).


Rates and fees are similar to fix and flip deals although ground-up deals usually are .5% more expensive on the interest rate to account for the additional risk.   Rates may be higher than bank financing, but the convenience of our private loans and the additional leverage that we allow for above what a bank would approve more than makeup for the costs.  

Ground Up Construction deals can be highly profitable, but be prepared to get started.   

Ready to get your build on? Contact us today to get your construction started!