Program 04 · Ground-Up
Ground-up residential construction financing to 85% of cost, structured around a real draw schedule — because a build stops the day a draw is late.
No credit pull to quote · No upfront fees · Approval in 24–48 hours
Ground-up construction financing for investors and small builders putting up single-family homes, townhomes, and small multi-family. It covers the spec builder doing three to ten homes a year, the investor who bought a teardown or an infill lot, and the operator converting entitled land into a finished, saleable product.
It is not a homeowner construction-to-permanent product. These are business-purpose loans on investment property, closed in an entity.
Leverage is quoted against loan-to-cost: land basis plus hard costs plus eligible soft costs. Up to 85% LTC, capped separately at 70% of the appraised as-completed value. If you already own the lot free and clear, that equity typically counts toward your contribution, which is often what gets a builder to the maximum leverage.
The loan funds in two parts. Land and closing costs fund at closing. Construction costs sit in a holdback and release in draws as work is completed and verified. Interest is charged only on the drawn balance, so the carrying cost ramps up with the build rather than starting at the full loan amount on day one.
Terms run 6, 12, or 18 months. Choose the term against a realistic schedule including permit and inspection lag, not the contractor's optimistic one. Extensions are available but they cost money and attention; building in three months of cushion at closing is cheaper.
New Construction loan terms
| Maximum LTC | 85% (land + hard costs + eligible soft costs) |
|---|---|
| Maximum as-completed LTV | 70% of as-completed value |
| Total points | 2–4% of loan amount |
| Rates from | 8.99% — varies by leverage, experience, and scope |
| Loan amount | From $75,000 |
| Term | 6, 12, or 18 months; extensions available |
| Structure | Draw-based holdback with inspection |
| Interest | Charged on the drawn balance only |
| Land equity | Owned lot equity counts toward borrower contribution |
| Property types | Single-family, townhome, small multi-family |
| Builder experience | Preferred — affects leverage and pricing |
| Closing timeline | 2–3 weeks from a complete file |
| States | 43 — excludes AZ, NV, ND, OR, SD, UT, VT |
Every construction lender advertises draws. The difference is whether they fund on time. A late draw does not just delay a payment — it stops the job. Subs leave for another site, and getting them back can cost weeks even after the money arrives.
Our draws are tied to defined completion milestones rather than a percentage guess. A typical residential schedule runs: site work and foundation, framing and dry-in, mechanical rough-in, insulation and drywall, interior finish and trim, final and certificate of occupancy. You submit a request against completed line items, an inspector verifies, and funds are wired.
What keeps a draw on schedule from your side: request against completed, inspectable line items; submit dated photographs and the relevant invoices or lien waivers; and schedule the inspection before the work is finished rather than after. Builders who batch these steps get funded reliably; builders who submit a percentage and wait get questions.
A construction file is heavier than a flip file. Expect to provide the plans and specifications, a line-item budget with a contingency, the executed builder or general contractor agreement, evidence of permits (or the permit application status), the appraisal basis for as-completed value, and your build history with addresses and completion dates.
Two things carry disproportionate weight. First, the budget contingency — a construction budget with no contingency line signals inexperience more clearly than anything else in the file. Five to ten percent is normal. Second, your completed build history. A builder with four finished homes gets materially better leverage and pricing than a first-time builder with the same plans on the same lot.
I've worked with a lot of hard money lenders over the years. Southern Ground Capital is different — they actually understand construction draws and timelines. The draw process was smooth, communication was excellent, and they funded every draw on schedule.
Common Questions
Submit the property and we will come back with terms in 24–48 hours. No credit pull. No upfront fees.