Ground-up construction loans for builders and developers
TSG Capital arranges ground-up construction loans for builders and investor-developers — business-purpose financing that funds a project from the lot through to certificate of occupancy. Lenders in our network typically fund a large share of land cost plus most or all of the vertical construction budget through a draw schedule, often up to roughly 80–85% LTC and capped against completed value. One application reaches our full lender network.
A ground-up construction loan funds new vertical construction — infill homes, spec builds, small multifamily, and townhome projects — from raw or entitled land through completion. Unlike a rehab loan, it finances the entire build, so the money is released in draws tied to construction milestones: foundation, framing, mechanicals, drywall, and final. You draw as you build and pay interest only on funds deployed, which keeps carrying cost down during the dirt-work and framing stages when nothing is generating income.
Leverage is usually described against cost and against value. Loan-to-cost (LTC) measures the loan against land plus hard and soft construction costs — lenders in our network often go up to roughly 80–85% LTC, sometimes funding 100% of vertical construction when the borrower brings the land or land equity. Loan-to-completed-value (or loan-to-ARV) caps the total facility against the finished appraised value, commonly in the 65–70% range, which is the lender's ultimate guardrail. A realistic budget, a licensed builder, and a defensible completed value are the three things that get a construction deal approved.
Terms typically run 12 to 24 months, interest-only, with a clear take-out plan — a sale or a refinance into a DSCR or permanent loan at completion. Rates and points vary by experience, leverage, and market, and we quote them as ranges. As a financing arranger, TSG Capital shops your project across construction lenders, aligns the draw schedule with your build, and can line up the take-out financing so you are not scrambling at C.O.
Typical terms
Figures below are typical ranges across our lender network — they are not a quote or a guarantee. Your actual terms depend on the lender, the deal, your experience, and the property's location.
Is this loan structure a fit?
| Best fit | Typical exit | Lender focuses on |
|---|---|---|
| New infill or spec construction | Sale or permanent refinance | Budget, builder, plans, completed value |
Who it's for
- Builders and investor-developers doing infill and spec construction
- Operators bringing a lot (or lot equity) who need vertical construction capital
- Small multifamily and townhome developers who need draw-based funding
- Entities with a licensed builder, a real budget, and a defensible completed value
What to prepare before requesting terms
A complete file is easier for lenders to price and materially reduces avoidable back-and-forth. Start with the items below; a lender may request additional documents after initial review.
Frequently asked questions
What is a ground-up construction loan?+
How much of construction cost will a lender fund?+
How do construction draws work?+
Do I need building experience?+
What is the exit on a construction loan?+
Is this a consumer mortgage?+
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