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$504K ground-up build in Tampa, FL — 80% LTC, 12-day close

Illustrative case study modelled on typical files for this program; figures are examples, not a funded loan.

Land: $150,000
Construction budget: $480,000
As-complete value: $860,000
Loan: $504,000
Loan-to-cost: 80%
Rate: 9.50%
Points: 2
Term: 24 months, interest-only
Days to close: 12
Units: Single-family
Exit: Sale

Rendering — the finished build, Tampa, FL

THE STORY

Situation

A first-time builder owned a residential lot and wanted to build a new single-family home for sale, but had never completed a construction project.

Structure

They hired a licensed GC with many completed homes in the county; the GC’s projects counted as the borrower’s experience. As a Tier 1 file the loan priced a step below the maximum — 80% of the $630,000 total cost at 9.50% with two points — and closed in 12 days.

In numbers: a $504,000 loan against $630,000 of total cost left $126,000 of borrower equity in the deal. The value test — 75% of the $860,000 as-complete value ($645,000) — sat above the loan, so cost, not value, set the size. Fully drawn, interest-only carry at 9.50% works out to about $3,990 a month, and 2 points of origination came to $10,080 at closing.

Draws

Foundation, framing, rough-in and final draws were requested by the GC with photos and invoices.

The file

What was in the file: the land deed, the house plans and permit status, the GC’s itemised budget and build schedule, the GC agreement, contractor license and insurance, a list of the GC’s completed homes in the county, builder’s risk insurance, and bank statements showing the cash to close and six months of reserves. The appraisal valued the finished home against recent new-construction sales nearby. Because the borrower had no completed projects of their own, the GC’s track record carried the experience review. The land the borrower already owned counted toward total cost at its documented basis.