Land & Development Financing

Land / development, sized on sell-out and release

Every row is recourse. What moves is how much, and pre-sales are the lever.

There is no DSCR on a for-sale deal.

A sponsor arriving from an income-property background brings the wrong numbers to this conversation, DSCR, cap rate, NOI, none of which apply here, and the file stalls before it starts. What governs instead is sell-out value, release pricing, and developer margin. The sooner a sponsor reframes the deal around those three, the faster it moves through underwriting.

Leverage is expressed as a percentage of sell-out, not of cost or value, because the lender's real security is the future sale, not the dirt today.

Release mechanics are the deal.

Leverage rises from 55% at finished-lot perm to 65% at vertical construction, but the number sponsors actually negotiate hardest over is the release price per lot and how paydown is credited against the loan. Get the release schedule wrong and a project that pencils on paper runs out of working capital halfway through the sell-out.

A sponsor who can explain their release mechanics clearly has demonstrated more credibility to a lender than any leverage table could.

Recourse is not negotiable here. Pre-sales are.

Every product on this page carries recourse, land and for-sale development are a fundamentally different risk profile than income real estate, and no lender in this market underwrites it non-recourse. What actually moves is how much recourse, and the primary lever a sponsor controls is pre-sales.

Units under contract before construction financing closes materially change what a lender will offer on leverage and guaranty burn-off. It's worth lining up pre-sales before, not after, the loan request goes to market.

Run the deal through the desk.

Underwriting and real options at no cost. A senior originator, not a queue.