Finished lots, horizontal development and vertical for-sale. There is no DSCR test. These loans size on sell-out and release, which is a different underwrite.
Every product here carries recourse. What moves is how much, and pre-sales are the lever.
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.
Leverage rises as a project moves from finished lots to vertical construction, but the number sponsors 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.
Every product on this page carries recourse. Land and for-sale development are a different risk from income real estate, and no lender in this market underwrites it non-recourse. What 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.
Enter the numbers and see what governs proceeds. When it looks right, hand it to the desk with the figures already filled in.
No cost to size a deal or see your options. Our fee is set in the LOI and paid at closing.
Also consider: Multi-family & Residential Rental · Commercial Income