Ground Up Construction Loans — Financing Solutions

A ground up construction loan provides capital to build a new property from the land or pre-development stage through completion. Financing may support land acquisition, site work, hard construction costs, soft costs, interest reserves, and contingency needs. These loans are commonly structured around loan-to-cost, project budget, borrower experience, collateral value, and the planned exit through sale, refinance, or stabilization.

Many construction loans use interest-only payments during the build period, so the monthly payment depends on the outstanding balance and interest rate. For example, a $300,000 interest-only loan at 10% would be about $2,500 per month; at 12%, about $3,000. Draw schedules can also affect payments because interest may accrue only on funds disbursed.

Construction loan approval is typically based on the project budget, borrower experience, property type, location, collateral, permits, equity contribution, repayment path, and overall feasibility. Lenders also review sources and uses, construction timeline, contractor qualifications, pre-leasing or sales strategy when applicable, and whether the project can transition into permanent financing, sale proceeds, or another defined exit.

Construction financing can often support a combination of land acquisition, site improvements, vertical construction, labor, materials, soft costs, interest reserves, and contingency reserves. Some structures may also include mezzanine financing, preferred equity, or joint venture equity when the senior loan does not cover the full capital need. Eligible costs depend on lender guidelines and project strength.

Traditional banks may offer lower-cost capital but often require tighter credit, lower leverage, longer approval timelines, and more standardized underwriting. Private construction lenders may provide faster execution, more flexible structures, higher leverage, or solutions for transitional and complex projects. Stirling Capital Group evaluates multiple lending options instead of relying on one credit box.

Yes. Stirling Capital Group works with construction and development financing needs across owner-occupied facilities, multifamily developments, hospitality projects, income-producing properties, and other commercial real estate categories. Available structures may include senior construction debt, bridge loans, mezzanine capital, equity solutions, and permanent or stabilization financing after the project reaches completion.

An exit strategy explains how the construction loan will be repaid after the project is completed or stabilized. Common exits include selling the completed property, refinancing into permanent debt, using rental income for stabilization financing, or recapitalizing with long-term investors. A clear exit improves lender confidence and helps determine loan structure, term, leverage, and reserve requirements.

To begin a review, borrowers typically provide a project summary, property details, budget, sources and uses, development timeline, borrower background, contractor information, current ownership or purchase agreement, plans, permits if available, and requested loan amount. The more complete the package, the easier it is to pre-qualify the opportunity and identify appropriate lending sources.