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Ground-up construction loans in Dallas–Fort Worth
Financing to build from the ground up, lot included: new homes, build-to-rent houses, duplexes, infill rebuilds and small apartment buildings. Experienced builders can borrow up to 90% of the total project cost.
Construction loan terms
| Experienced builders | up to 90% of cost |
| Standard | up to 85% of cost |
| Limit on finished value | 70 to 75% |
| Lot cost financed | up to 70% |
| First-time builders | programs available |
| Smallest loan | $75,000 |
Builders with fewer recent projects, and smaller markets, are usually limited to 80% of cost.
Two limits decide the loan
Loan-to-cost measures the loan against what you spend on the lot and the build. Loan-to-value measures it against what the finished property will be worth. A construction loan has to fit inside both.
- The lot: up to 70% of what you paid can be financed.
- The whole project: normally up to 85% of cost.
- Experienced builders in major markets: up to 90% of cost.
- Less active builders and smaller markets: usually up to 80% of cost.
- Always: no more than 70 to 75% of the finished value.
Example
| Infill lot | $120,000 |
| Construction budget | $380,000 |
| Total cost | $500,000 |
| Finished value | $720,000 |
| 85% of cost | $425,000 |
| 90% of cost, experienced builder | $450,000 |
| 75% of finished value, the ceiling | $540,000 |
Who qualifies
Your record sets your leverage. Builders with completed projects get the most. First-time builders are not shut out: we have programs for them too.
Building in North Texas
- Soil and foundations. Expansive clay means new slabs are usually engineered for the site, often after a soil report. Budget for both.
- City permits. Dallas, Fort Worth and each suburb run their own permit and inspection offices, and review times vary. Plan the schedule, and the loan term, around a realistic permit date.
- Zoning. Confirm what the lot allows before you design. Many infill lots near downtown Dallas and Fort Worth allow duplexes or townhomes, while suburban lots are often single-family only.
- Build-to-rent. New houses built to hold as rentals are common across the metroplex. When the house is finished and leased, a DSCR loan can take out the construction loan.
- Historic districts. Dallas has historic districts in East Dallas and Oak Cliff, including Swiss Avenue, Munger Place, Junius Heights and Winnetka Heights, and Fort Worth has districts such as Fairmount and Ryan Place. Exterior work in a historic district needs approval from the city’s landmark or historic preservation commission as well as a building permit.
From construction loan to rental loan
Many investors build to keep. When the property is finished and leased, a DSCR rental loan pays off the construction loan and replaces it with long-term debt.
Finishing a stalled build
A construction completion loan lends against the project as it stands today and adds what is needed to finish it.
Documents we ask for
- Loan application and personal financial statement
- A line-item construction budget with a clear scope of work. Draws are paid against it
- Plans, drawings, soil report if you have one, and permit status
- Your general contractor’s details, insurance and recent completed projects
- Your own projects from the last 2 years, with settlement statements
- Two months of bank statements showing reserves
- Insurance and title contacts
The full list is in our hard money loan document checklist.
Construction loans: common questions
Normally up to 85% of the total project cost, and up to 90% for experienced builders in major markets. The loan must also stay within 70 to 75% of the finished value.
Yes. Up to 70% of the lot cost can be financed, as long as the total loan stays inside the loan-to-cost limit.
Yes. Build with a construction loan, then refinance into a DSCR rental loan once the home is leased.
Yes, we have first-time builder programs. Leverage rises with a record of completed projects.
Yes. A construction completion loan is based on the current as-is value plus the cost to finish.
Have a lot and a set of plans?
Send the address, the price and what you plan to do with the property. We will reply with the leverage and pricing that fit your deal.