Construction Financing From Land to Completion

A ground-up project moves through several stages, from acquiring land to completing the finished property. New construction loans can provide financing across this process by combining acquisition and construction costs and releasing funds through milestone-based draws. This structure is different from traditional long-term mortgage financing because the loan is designed around the construction period and the expected completion of the project.

For builders considering residential construction loans, the project budget and construction experience are important considerations. InstaLend requires borrowers to be licensed general contractors or have demonstrated prior construction experience. The program does not require income verification, including W-2s or tax returns, and approval is based on the project's loan-to-cost ratio rather than personal income. Lenders can also consider factors such as land value, construction costs, projected completed value, LTC, and the overall plan for the project.

InstaLend offers new construction financing from $50,000 to $5 million or more, with up to 90% of total project cost available. Funds are released through milestone-based draws as construction work is completed. The loan term is 12 months, with extensions available, and interest is charged only on drawn funds. Borrowers can request pre-approval, which typically takes 24–48 hours. These terms give builders a defined short-term financing structure while they move through the construction process.

The final stage is planning how the financing will be repaid. For a spec home, selling the completed property is one stated exit strategy. If the investor decides to keep the property, refinancing into long-term financing is another option. InstaLend's construction loan has no prepayment penalty, allowing the loan to be repaid early if the project is sold ahead of schedule. Before breaking ground, investors can review the total project cost, LTC, construction budget, expected value, loan term, draw structure, builder experience, and intended exit to understand the financing requirements.