What Is a Ground-Up Construction Loan?
A ground-up construction loan is a financing solution designed for real estate investors who are building a property from the ground up. These loans are typically structured as short-term construction financing with funds released in stages as construction progresses.
Ground-up construction loans help investors finance new builds while managing cash flow throughout the construction process.
How Chavez Capital Ground-Up Construction Loans Work
Chavez Capital works with private and institutional lenders that specialize in ground-up construction financing. Our team helps structure construction loans based on the project scope, budget, timeline, and exit strategy.
We assist investors from initial review through closing and construction draws, helping streamline the financing process so you can focus on building.
Ground-Up Construction Loan Highlights
- Financing for new construction projects
- Structured draw schedules based on construction milestones
- Asset-based underwriting
- Flexible loan structures based on project strength
- Interest-only payment options during construction
- Available nationwide (not available in UT, MN, VT, or SD)
Common Ground-Up Construction Scenarios
- New residential construction projects
- Projects with a defined exit strategy (sale or refinance)
How the Ground-Up Construction Loan Process Works
1. Apply
Submit basic project and property details to receive initial terms.
2. Confirm Terms & Submit Documents
Upload construction plans, budget, and required documentation.
3. Underwriting
Our underwriting team reviews the project and finalizes loan approval.
4. Approval
Receive final approval and updated term sheet.
5. Closing & Funding
Loan closes and construction funds are released through a draw process.
Ground-Up Construction Loan FAQs
No, owning the land is not required to qualify for a ground-up construction loan. However, if you do own the land, the amount you paid for it may be used as equity toward your project. Eligibility ultimately depends on the overall project, structure, and exit strategy.
Construction funds are released through a reimbursement draw schedule based on completed construction milestones and inspection verification. Each draw is disbursed as work is completed and approved.
Some construction loans may include eligible soft costs depending on the project.
Common exits include selling the completed property or refinancing into a long-term loan such as a DSCR loan.
Yes, construction loans are available in 46 states, excluding UT, MN, VT, and SD.
Ready to Finance Your Construction Project?
Apply today and see if your ground-up construction project qualifies for financing.