Loan structure
Acquisition, development and construction loans, matched to your deal
An acquisition, development and construction loan, usually shortened to AD&C, finances all three phases of a project under one facility: buying the land, completing the horizontal work, and building vertically. It is released in draws across the phases and repaid by sale or by a permanent takeout on completion. Because one lender is carrying three different risks in sequence, programs differ widely on budget scrutiny, phase gates and sponsor requirements, which is why the same project is worth putting in front of several at once.
- 5,000+loan programs screened
- 5–8matches on a typical deal
- $0 upfrontto submit and compare offers
- 0.50–1.00%broker fee, paid only at closing
Who is an AD&C loan actually for?
Developers who control a site but have not yet bought it and want one lender through the whole build, homebuilders taking down and developing their own land, and sponsors of commercial or multifamily projects where the horizontal and vertical work will be done by the same team. If the land is already owned and improved, a construction loan is the simpler tool; if only the site work is planned, a land development loan fits.
What do AD&C lenders disagree about?
Phase gates and equity. Programs take different views on what must be true before the vertical draws begin, whether the land basis and the sponsor's prior spending count toward equity, how much contingency they want across two distinct budgets, and whether the loan should convert to a mini-perm at completion or be repaid by a separate takeout. They also underwrite the general contractor and the civil contractor separately, and some want the same sponsor to have done both before.
What should be ready before an AD&C file goes out?
The purchase contract and entitlement status, a budget with acquisition, horizontal and vertical costs shown separately and each with its contingency, the contractors for both phases, a schedule that sequences the phases with the draws, and a clear exit. Files that arrive with the three budgets already reconciled to one schedule get taken seriously faster, because the first thing an AD&C desk does is test whether the phases fund in the right order.
How does getting matched actually work?
You describe the deal once — about five minutes — and it is screened against 5,000+ loan programs. Most deals return 5–8 matches, and the median first offer arrives in under an hour. There is $0 upfront; the fee is 0.50–1.00%, paid only at closing.
YieldStack is a commercial mortgage brokerage, not a lender. The rate, the leverage and the credit decision belong to the lenders competing for your deal; our job is making sure the right ones see it at the same time, so the terms you compare are real competition rather than one desk’s appetite.
What do lenders actually look at?
Every program weighs these in its own way — which is the argument for several quoting at once.
- Whether the three phase budgets are complete and each carries its own contingency
- The sponsor's record on projects that combined site work and vertical construction
- Entitlement and permit status ahead of each phase gate
- How the draw sequence and the inspections are controlled across phases
- The stated exit, and whether the schedule supports it
Frequently Asked Questions
Why use one AD&C loan instead of three separate loans?
Continuity. One lender, one set of documents and one draw process across the phases removes the risk of a gap between the land, the site work and the build. The trade is a more demanding underwriting up front.
When does the vertical phase get funded?
After the phase gate the lender sets, usually completion of the horizontal work, final permits and any pre-sale or pre-lease conditions. Each program writes those conditions its own way.
Does the land I already own count as equity?
Often, at the lower of cost and current value, and programs differ on how much of it they credit. Prior spending on entitlement and engineering may count too, with documentation.
Can an AD&C loan convert to permanent financing?
Some programs offer a mini-perm conversion at completion; others expect a separate takeout or a sale. Which one fits depends on whether the project is being held or sold.
Is AD&C only for residential subdivisions?
No. The structure suits any project that buys, prepares and builds a site in sequence, including industrial parks, multifamily communities and mixed-use developments.
How do lenders treat the two contractors?
Separately. The civil contractor and the general contractor are underwritten on their own records, and a completion guaranty is often expected for the vertical phase.
Is YieldStack a lender?
No. YieldStack is a commercial mortgage brokerage, not a lender. Every term sheet comes from a lender in the network and is subject to that lender's underwriting.
Does it cost anything to see terms?
No. It costs $0 upfront to submit a deal and review offers; YieldStack's broker fee is 0.50–1.00% of the loan amount and is paid only at closing.
Is financing guaranteed?
No. Every credit decision is made by the lender; YieldStack arranges the introductions and negotiates on the borrower's side, and no loan, rate, or closing is guaranteed.
Next step
One deal.Several lenders.
YieldStack is a commercial mortgage brokerage, not a lender.